Ten years on ….
THE AGE letters 2 February 2011
Acres of wealth
THE value of land embraced by the latest extension of the urban growth boundary has jumped from $25,000 to $375,000 a hectare, raising the land tax bill for the average 40-hectare lot from $2975 a year to $294,975 a year (The Age, 1/2).
A quick multiplication indicates that the value of the 40-hectare lot has leapt from $1 million to $15 million. Pity the poor owner, who did nothing to deserve such a burden. And now the wicked land tax would claw back the windfall at 2.1 per cent a year. Outrageous! Much better to maintain a payroll tax on businesses that hire people, and a stamp duty on home owners who relocate to take up jobs.
Worse, the tax will force some landowners to sell. That means the land inside the urban growth boundary will actually be used for urban growth. Unacceptable! And the buyers will be riff-raff who want to build their own homes. Obscene!
With a bit of luck, the new state government will roll back the tax so that the owner of the 40-hectare lot can sit on it even longer, waiting for its price to rise even higher, at the expense of first home buyers who have ideas beyond their station.
Gavin Putland, Land Values Research Group, Melbourne