Australia - land and property tax system - Statistical Data Included

American Journal of Economics and Sociology, The,  Dec, 2000  by Geoffrey A. Forster

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These figures show that the land-value rating group had a dwelling-construction activity greater than that for the annual value rating group for the same period. Not only that, but the activity in each of the states in Group One is above that of any state in Group Two.

Further still, some of the districts in South Australia and Victoria rate upon the land-value basis, while in Tasmania, none at all do this. It is significant, therefore, that Tasmania is at the bottom of the list.

The direct connection between the rating systems and dwelling construction may be pursued still further within the two states that have some districts rating land values. It is then seen that these are the districts which contributed most to their states' better showing than Tasmania.

In Victoria, although at the 1921 census only 16 percent of the state's population was in the 14 districts rating land values, these districts accounted for 46 percent of the total increase in dwellings for the state between the two census years. Moreover, in Melbourne (Victoria), over the 20-year period from 1921 to 1940, the municipalities rating land values built 2.12 times as many houses per acre available for building as did their counterparts rating on the annual value system. Similarly, evidence submitted to the Commonwealth Housing Commission in South Australia showed that dwelling construction in the districts rating only land values was markedly superior to that in the districts rating both land and improvements under the annual-value system.

The Melbourne Metropolitan Statistical District is of particular significance because it is made up of a large number of local government authorities, almost equally divided between those using site-value rating and those using annual-value rating. A study of this district by Kenneth M. Lusht, chairman of the department of insurance and real estate at Pennsylvania State University, using data reflective of the 56 local government authorities through 1989, concluded: "There is evidence of a long-run association between the use of the site value tax and the intensity of development, and indicates that the use of the site value tax stimulates faster development." [4]

The ratio of the value of improvements to unimproved land value in 1939-40 was 151 percent in the land-value rating states to only 79 percent in the others, and it was highest, 198 percent, in Queensland, where the land-value tax is highest. Further, the average total value of improvements per land taxpayer was fully twice as great in the Group One states as in the others. This would seem to indicate that the exemption of improvements has tended to encourage the construction of not only more, but better, improvements, and that these benefits are directly related to the weight of taxation placed upon land values.

The average annual wage paid to adult male workers in factories, according to the Commonwealth Year Book for 1938, was [pound]237 for Group One, and the real wage index, having regard to changes in the cost of living, drawn from the same source, was 1,274. For Group Two, the group average wage was [pound]219 and index figure 1,160 (the year 1911 as base 1,000).