A Review of the Taxation of Property: Local Government Rates in Victoria 1

The paper reviews the taxation of property in Victoria and in particular the method of raising revenue for local government from rural landowners. A major contradiction between the apparent philosophical basis and its application is identified. A modification to the existing method of calculation is suggested based on the use value of rural land. The advantages and disadvantages of the use value modification are discussed and compared to the system of property taxes presently used. The use method system implies a changed incidence of tax on the three categories of taxpayer; farm, residential and commercial. The split between these categories for aggregations of local governments under the proposed situation and in the present situation is compared.