Published on 01 Apr 05
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
In Progress and Poverty, Henry George advocated the taxation of land as a progressive, reliable and sustainable source of public finance. This contrasts sharply with the recent decision by the New South Wales Government to end its short-lived and controversial experiment in taxing owner-occupied homes from 2005.
This article will analyse the development and application of this tax on high value principal places of residence (the 'Premium Property Tax') through an examination of relevant parts of the Land Tax Management Act 1956 (NSW) and the Premium Property Tax Act 1998 (NSW). It will also examine the widespread opposition to the tax, and the reasons why it was widely considered to be 'outdated, unfair and unworkable'. This will involve a focus on the political considerations, legal uncertainties, and environmental consequences generated by Premium Property taxation, and how these issues contributed to its demise. This analysis will determine why the tax failed to provide a lasting or sustainable contribution to public financing.
The case of Premium Property Tax demonstrates that the exemption of owneroccupied land from direct taxation remains a fundamental tenet of public financing in Australia. Superficially, this would appear to be a setback for proponents of the taxation theory of Henry George. However, this article will indicate that the demise of the Premium Property Tax in NSW has provided a new impetus for a broadly based system of land taxation on land apart from principal places of residence.
Robert Stokes is a Lecturer in the Department of Business Law at Macquarie University, Australia.
Current at 1 April 2005 Current at 06 October 2005