Completely agree. That property value grows over time in a fixed area is natural behaviour, as an area develops, density grows and demand increases. But that growth is not necessarily “productive”. The only time that value is productive is if it incentivises redevelopment into higher density dwellings to meet the demand in that area. However this has been perverted into property owners who have paid off their property to just sit on the valuable land and reap the capital gains.

Capital gains from land value really needs to be taxed in a special way as you suggest. Two promising approaches are:

• Adding land tax (and abolishing stamp duty on property) that’s not based on your property value but on the value of a property you’re on (so high density apartments would end up with minimal land tax

• increasing capital gains from land tax by either having a progressive taxation rate on capital gains due to land value (which would ignore increase property value from renovations etc) or capping it entirely (so gains above that are taxed at 100%).