Not quite. The point is to raise taxes on the unimproved value of land. For example, two identical lots with the same underlying land value – one vacant and one with an apartment building – would both pay the land tax, but it would be the same amount. They key idea being to heavily incentivize the owner of the vacant lot to do something with it (like build housing) rather than just sit on it as a speculative investment. It should cost speculators money to keep valuable land idle.
It reveals that much of the anticipated future tax obligations appear to have been already capitalised into lower land prices. Additionally, the tax transition may have also deterred speculative buyers from the housing market, adding even further to the recent pattern of low and stable property prices in the Territory. Because of the price effect of the land tax, a typical new home buyer in the Territory will save between $1,000 and $2,200 per year on mortgage repayments.
As they should. Property taxes are broken and enable land hoarding and speculation.
Not quite. The point is to raise taxes on the unimproved value of land. For example, two identical lots with the same underlying land value – one vacant and one with an apartment building – would both pay the land tax, but it would be the same amount. They key idea being to heavily incentivize the owner of the vacant lot to do something with it (like build housing) rather than just sit on it as a speculative investment. It should cost speculators money to keep valuable land idle.
Even a quite milquetoast land value tax, such as in the Australian Capital Territory, has been shown to reduce speculation and improve affordability: