A groundbreaking proposal from Australia’s McKell Institute advocates for a transformative wealth tax targeting the nation’s most affluent landholders to address housing affordability challenges. The ‘Extreme Land Wealth Levy’ would impose annual charges on approximately 4,630 ultra-wealthy Australians possessing land portfolios valued at $20 million or higher—representing the wealthiest one percent of households.
Under the innovative scheme, landholdings between $20-50 million would face a 0.75% annual levy, while properties exceeding $50 million would incur a 1.25% charge. The institute projects this could generate approximately $3 billion annually, which would then be redistributed to states and territories exclusively for reducing stamp duty costs for new homebuyers, explicitly excluding property investors from benefits.
McKell Institute Chief Economist Alison Pennington emphasized the proposal addresses systemic inequities: ‘Average workers surrender one-quarter of their income biweekly, while ultra-wealthy landholders accumulate millions in untaxed, unearned gains over decades.’ She noted the levy would be financially negligible to affected landowners but transformative for aspiring homeowners.
The mechanism would function through Commonwealth administration utilizing existing state valuation systems, applying solely to land value excluding improvements. Principal residences below $20 million land value and genuine agricultural land would be exempt, with build-to-rent developments qualifying for special considerations and development incentives.
This proposal emerges amidst intensifying national debates surrounding housing accessibility and tax fairness, complementing existing state-level initiatives like NSW’s First Home Buyers Assistance Scheme and federal support programs including the 5% deposit guarantee scheme.