Fuck a flat land tax idea. On top of GST, Income Tax, Rates and interest (plus stamp duty), it’s just a money grab.
Comment on Could a tax against empty homes help end Australia's housing crisis?
Nath@aussie.zone 1 year agoA flat land tax is a bit rough. You may some 80-year-old pensioner living in a simple house in suburbs. They’ve lived there for 60 years, only that suburb is now gentrified and a blanket 1% tax on the house is now a $10k/year tax bill they need to come up with (Just making up example of 1% of $1 Million property) just to stay in their own home.
This is a tough problem to figure out. I’m glad it isn’t my job. Whatever the solution is, I’m sure it’s more complicated that just blanket-taxing land. There’d need to be some exemptions to address this (which wouldn’t be that uncommon) and other scenarios I’m too dumb to think of. And whatever exemptions are applied, would naturally lead to people exploiting them as loopholes.
Getawombatupya@aussie.zone 1 year ago
DogMuffins@discuss.tchncs.de 1 year ago
In the 80s I think there were a few proponents saying that a land tax could replace all other taxes. Very broad based and efficient.
IDK if it was a good idea, it probably would’ve been good in the 80s IMO.
However, completely retarded in the digital age. Productivity does not require land anymore.
w2qw@aussie.zone 1 year ago
Yeah that single tax movement has been around since the 1880s. Replacing all other taxes is maybe a bit extreme but pretty much all economists suggest increasing land taxes including our own Henry Tax review.
However, completely retarded in the digital age. Productivity does not require land anymore.
If this was the case land wouldn’t make up the majority of “wealth” and we wouldn’t be having a housing crisis.
DogMuffins@discuss.tchncs.de 1 year ago
True, increasing land tax is a great idea.
Property is valuable but generally we don’t tax wealth, only production.
w2qw@aussie.zone 1 year ago
I mean like do you have an alternative to taxes?
Getawombatupya@aussie.zone 1 year ago
Honestly, I’ve been on this rock long enough to know a new tax goes on the the rest don’t come off.
briongloid@aussie.zone 1 year ago
This issue is actually what undid Margaret Thatcher
w2qw@aussie.zone 1 year ago
The people at prosper have put some thought into this. www.prosper.org.au/…/stamp-duty-to-land-tax/ there scheme allows the elderly to defer the tax until sale which prevents them from being forced to sale but still incentivises it.
Nath@aussie.zone 1 year ago
I didn’t realise that the idea was to replace Stamp Duty with land tax. The biggest hurdle I see with that idea is that Queensland, New South Wales, South Australia and Western Australia^*^ have all privatised their land registries. Stamp Duty now goes to private companies and not the state governments. They can’t simply replace stamp duty with a land tax.
^*^WA han’t totally privatised their Land registrar, but the process of collecting Stamp Duty is private and the proceeds of a land transfer don’t go to the government.
abhibeckert@lemmy.world 1 year ago
Stamp Duty now goes to private companies and not the state governments
WTF? When you sell a house, the $40,000 Stamp Duty fee does not go to the company running the land registry. It absolutely goes to the government.
Maybe the company gets fifty bucks or something. They’re not getting $40k.
w2qw@aussie.zone 1 year ago
As bad as privatising land registries as it’s not like the 6% stamp duty you pay is going to the land registry. There’s probably a nominal fee that these land registries are getting on each lookup and transfer.
RustyRaven@aussie.zone 1 year ago
I think options to defer payment until sale of the house for people with low incomes would be worthwhile, but considering the massive benefit we give to pensioners who own their own home I don’t think it is unreasonable for some of that to be repaid from the sale of the house. If that same pensioner held a similar value of assets in any other form we would expect them to be fully self-funded and they would not see a cent of pension.
Nath@aussie.zone 1 year ago
I’m no expert in this stuff, I shouldn’t be getting to involved in a discussion on the matter. I don’t entirely disagree with you, but houses are a bit different (and the ATO recognises this fact). As everyone is very (very) aware: 60 years ago, houses did not cost $1 Million. The simple 3x1 on a quarter acre was purchased for something like $30k. The owner paid if off diligently, paid all taxes owed from income through the years and the welfare system in place at the time assured citizens that there would be a pension at the end of their working life.
It is not this individual’s fault that most of the old houses in the street are long gone, that all those blocks were subdivided and that a quarter acre in Carlton North these days is worth $1 Million. They’ve never been rich. They don’t have any liquid wealth.
On the flip side, I agree that wealthy people pay a far smaller proportion of their income in tax than us mere mortals pay. Getting them to pay a similar proportion of tax is desirable. I’d love a solution to this problem. But, I don’t want that solution to hurt thousands of people in the spirit of being ‘fair’.
RustyRaven@aussie.zone 1 year ago
So what is your argument here, that people who got asset rich through no effort of their own should have that wealth protected so their kids can inherit as much as possible? Is it ok to tax someone if they worked hard to earn the money to buy a $1 million dollar home today, but if you got lucky in the past you should be tax exempt? Tying up your assets in your home already has some major tax benefits - it is exempt from capital gains tax, and barely counts towards the age pension.
Yes there need to be corresponding changes to allow for things like putting off the tax until the home is sold, but I don’t think we should rule out changes to the tax system because your hypothetical home owner didn’t intend to earn 970,000 profit when they bought their home. Perhaps we could also make a change so that this hypothetical pensioner could sell their quarter acre block and move into somewhere smaller that they can more easily maintain, freeing up some of that money so they can actually spend it, without losing most/all of their pension because the same wealth is now “liquid wealth”.
Nath@aussie.zone 1 year ago
My argument is merely that a flat land tax is not as fair as it sounds on the face of it. There are issues with it - and if the intent is to replace stamp duty with a land tax, that’s a total non-starter for most of the country: since stamp duty has been privatised.
I’m certainly not qualified to produce a solution to the problem.
Taleya@aussie.zone 1 year ago
well, yeah. Because it’s the house they actually live in, not shares or stocks.
RustyRaven@aussie.zone 1 year ago
Why does being a house they live in mean it is not also an asset? If someone prefers to rent and save up more money towards their retirement instead of buying a house why should they be penalised? If someone wants to buy an inner city appartment that is worth less and have more money put aside to pay the body corporate fees why should they get less pension than if they have a freestanding house? If someone wants to sell their house, put that money aside while they travel in a van around Australia for a few years and then buy something suitable when it is time to settle down again, why should they lose their pension compared to someone who leaves the house mostly empty while they travel so it doesn’t count as an asset?
We definitely should have some consideration for the fact that this is someone’s house and they shouldn’t lose it because of unrealised capital gains, but we also shouldn’t be creating a two-tier system which also ties people in to keeping a house which may not be suitable for them any more.
Taleya@aussie.zone 1 year ago
Because the value is not immediately and readily accessible without uprooting their entire life.
Tax the shit outta the sale, sure but basically penalising someone for living in their own house opens up a lot of very bad doors.