Improving Housing Mobility: Transaction or Recurrent Land Tax

The review of Australia’s tax system of 2009/10 made a number of recommendations that contribute to improving housing mobility, particularly in the capital cities of Australia. Among the recommendations is the reduction or removal of up front transaction taxes on the purchase price of property and replacing this impost with a recurrent tax spread across the holding period of property. This paper examines the relationship and emerging trends between State government taxes that impact property and revenues from these sources and reviews options for the transition from transaction taxes to a recurrent tax on land. Through the analysis of the conveyance stamp duty currently paid on property against an annual impost on land, it is determined that options exist for the transition from a less to a more efficient tax on property