photo credit: ChicagoGeek Dr Gavin Putland As Monash City Council tries to manufacture consent to tax buildings through council rates, the same idea looks set to be dumped in Tasmania and has just been pilloried in the local press in WA. Strictly speaking, the systems under attack in Tasmania and WA are based on the rental value of the property, … Read More
The real issue forcing land prices up are the huge economic rents available to land speculators. With Jeff Kennett’s move away from Site Value rating to Capital Improved Value (CIV) rating, land speculators can purchase land, sit on it and wait for the property to grow in value. The constant attack on State Land Taxes ensures a continuing trend for them to be weakened, sending the signal to the marketplace that hoarding land is appropriate.
On a local level, the combination of these 2 factors has seen a growth of vacant land in inner urban areas in Melbourne. We believe the reduced supply of land from this speculative trend has applied greater pressure on land prices than Melbourne’s 2030 boundary. The huge upward trend in land prices happened well before the 2002 announcement of 2030.