The Australian Capital Territory has adopted measures to abolish stamp duty and impose a land tax on all real property: Will this approach be adopted by other States in Australia?
McLaren, J, The Australian Capital Territory has adopted measures to abolish stamp duty and impose a land tax on all real property: Will this approach be adopted by other States in Australia?, Journal of the Australasian Tax Teachers Association, 8, (1) pp. 1-14. ISSN 1832-911X (2014) [Refereed Article]
From 1 July 2012 the Australian Capital Territory (ACT) imposed land tax, in the form of
general rates, on all commercial and residential property in the ACT, including owner
occupied homes, on a progressive basis. Marginal rates of tax are applied on increased
values of the land. The ACT is unique in that there is no local government so the ACT
government was able to increase its general rates on owner-occupied homes and reduce
land tax on investment properties and commercial properties. As a result of the
subsequent increase in government revenue, the ACT has substantially reduced stamp
duty on real property conveyances with a view to abolishing stamp duty over the next
20 years. The ACT government undertook a review of its tax system in 2012 and one of
the major recommendations was to broaden the land tax base to all principal places of
residence and to abolish stamp duty on conveyances of real property. This approach
follows the recommendations of the Henry Tax Review. This paper will examine the
current approach to the imposition of land tax in the ACT as well as the
recommendations on the need to broaden land tax contained in the Henry Tax Review.
The conclusion arrived at in the paper is that the ACT approach to the abolition of stamp
duty and the imposition of a land tax on all property in the ACT should eventually be
adopted by all States in Australia and the Northern Territory.