In a revenue neutral move, the Australian Capital Territory is gradually phasing out stamp duty and replacing with land tax.This is done by decreasing stamp duty by .01% each year and increasing land tax by .01% a year. The amount of land tax reflects the local economic activity and government infrastructure. To give an example if a suburban railway line is extended into the next suburb and the value of local real estate increases, is it not right the owners should give something back in return? If on the other hand a bit of government infrastructure makes land values decrease, the land tax reduces correspondingly.
