Hobart has been obsessed for some time about some red awnings that have been attached to a sandstone heritage building in Hobart. The building is the former Savings Bank of Tasmania, but is now in private hands, and used as a residence. The owners spend much of theri time in Sydney, and use the Murray St residence as their away ‘townhouse’. I have no objection to that, and according to reports, they have transformed the interior of the building very tastefully . I applaud that.
But there is a bigger issue. The Tasmanian Land Tax system should ensure that Tasmanians get a proper return on inner-city land values. Giving them away to wealthy buyers is very bad. Poorer Tasmanians pay the price, either by higher taxes on things they make or do, or by reduced services of the things a community needs. I wrote this letter to The Mercury, to bring attention to the problem.
Now that the red awnings saga is over, we can think of matters that matter. I suspect that poorer Tasmanians awaiting surgery have had more pressing concerns than the shade of red used. They would be worried about their pain and the waiting list.
There is a link. The Murray St property, if it is now designated as the ‘Principal Place of Residence” will be exempt from Land Tax. Formerly, when used as a business, it would have contributed significantly to the State’s coffers. But it is still valuable land, in the city centre. The owners should contribute accordingly.
We cannot continue to ignore the most equitable, efficient and progressive revenue source. Put simply, we should all pay for the share of the earth that we occupy. A flat rate land rent system on all land would make us all better off. We could afford the services we require.
Of course, we cannot know exactly what payment is made on the property. Apparently, that is private information. Why? The tax payable on every property should be published for all to see and compare. What is there to hide?
Someone asked the other day why, when they had paid for their land, they should also pay land tax.
It’s a good question, and to some extent a fatal hole in explaining any partial land tax system.
I’m coming to the conclusion that the only way to successfully introduce land tax is to introduce it in complete form; that no price is paid for land, but that land tax is thereafter paid at the full market rate required to maintain a zero price for land.
The system should be established at the state level, not federally.
Both stamp duty and payroll tax should be simplified and reversed.
A portion of the take should be utilised to monetize community benefit.
A reasonable estimate of the annual levy would be the product of the current housing interest rate and land value.
Without question, the state government should pay out the value of land resumed under this arrangement, in proportion to the initial charge. If it needs to do so (and it would), the costs for capital on the market would be substantially less than the income returned.
By: intuitivereason on January 18, 2012
at 6:49 am