The Productivity Commission has produced a draft report that looks at ways to increase the supply of land for housing. The report includes many good ideas, such as getting rid of minimum parking requirements, which we will talk about in future blogs.
One of the Productivity Commission’s ideas is to charge rates on public land in order to encourage the public sector to free up land for housing development. In our view there is a much more powerful solution to the problem of freeing up land for housing. Land banking is really a private sector problem, where people buy land and hold onto it waiting for the price to go up. We think taxing the unproductive use of capital – especially land – via a Comprehensive Capital Income Tax (CCIT) would solve this problem. This Whiteboard Friday looks at what a difference a CCIT would make to land banking.
You can find out more about the Productivity Commission’s report and make submissions on it here.