melbourne urban boundary extension a no goer, page-2

If this was to go ahead.


So the young person would pay $15k more for a house and land package, due to the $15,000 increase in levy per block.

If you bump up the marginal cost of a dwelling, its substitutes will also rise, thereby increasing the value of all existing housing stock by $15k.


So not only does the young family starter lose by taking on $15k more debt, his parents and property investors win by getting a free $15k capital gain.


But what if the infrastructure burden was shared by all land holders? By bumping up land taxes and removing the exclusions on Owner occupied residences (you can be sitting on $20m of land in Toorak and pay no extra land tax apart from council rates).

This is exactly where land tax becomes such a compelling story.