POLICY / TAX REFORM

The Land Tax Imperative

Stamp duty is a tax on mobility; income tax is a tax on effort. Replacing both with a broad-based land tax is the single most effective lever for economic reform.

According to the Ken Henry Tax Review, stamp duty is the most inefficient tax in Australia, actively preventing people from moving closer to jobs or downsizing when their children leave home.

The Georgist Solution

A broad-based land tax captures the unearned increment of land value increases generated by public infrastructure, while removing the transaction penalty of stamp duty. It cannot be avoided, as land cannot be moved offshore.

Stamp Duty vs Land Tax Breakeven

Calculate how many years it would take for an annual land tax to equal the upfront frictional cost of stamp duty.

Property Purchase Price ($) Land Value Ratio (%) Avg Stamp Duty Rate (%) Proposed Land Tax Rate (%)

Upfront Stamp Duty

Annual Land Tax (on Unimproved Value)

Breakeven Horizon

Years

Interactive Tool Requires JavaScript

This calculator requires JavaScript to function. Below is the underlying formula so you can perform the calculation manually:

Breakeven = (Purchase Price × Stamp Rate) / (Purchase Price × Land Ratio × Land Tax Rate)

Shows that upfront stamp duty often exceeds decades of sustainable land taxation, acting as a massive barrier to entry.

Frequently Asked Questions

Won't this force pensioners out of their homes?: Every serious policy proposal includes a deferral mechanism, allowing asset-rich, cash-poor retirees to accrue the tax liability against the final estate value, meaning they pay nothing out of pocket while living.