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The Australian Taxation Office (ATO) provides guidance that the value of a new crypto asset received from a chain split is not treated as either ordinary income or capital gain at the time of the split, provided the owner holds it a s a capital asset rather than in connection with carrying on a business. This article considers whether this guidance is well founded in cases where the crypto assets involved are cryptocurrency coins. In a chain split, the digital ledger on which cryptocoins are traded divides into two forks, resulting in two distinct cryptocurrencies. Each owner of a cryptocoin before the chain split ends up owning two separate coins, one of each of these cryptocurrencies. In its guidance, the ATO further provides that a chain split is generally not a capital gains tax (CGT) event unless the holder's rights and relationships with respect to both post-split coins have changed, in which case the chain split will be treated as an abandonment of the original coin (CGT event C2). In all cases, any new cryptocoin is assigned a zero-cost base, which is consistent with treating the coin as though it were found property. In this article, the authors question whether the ATO's approach is consistent with the nature of cryptocurrency chain splits and with settled tax law, arguing that the approach can lead to tax outcomes that differ significantly from economic reality. The authors suggest that the ATO may have erred by identifying either of the post-split coins as newly found and by considering the original coin to be lost or abandoned in some circumstances. The authors argue that cryptocurrency chain splits are more akin to property divisions (such as land subdivisions), and suggest that it would be more appropriate to apportion the cost base of the original coin between the two post-split coins using the split asset method applied in tax cases involving land subdivisions. This conclusion is based on a finding that the coin owner's rights and relationships with respect to both post-split coins remain unchanged from those associated with the original coin. This article's chief contribution is to explore the meaning of rights and relationships with respect to cryptocurrency and to show that, while it may be convenient to refer to one of the post-split coins as new, in fact, each post-split coin is a continuation of the original coin, much as two post-division lots of land are merely a continuation of the larger lot of land before subdivision. Both postsplit coins, like both post-division lots, literally trace their chain of title back to the original asset. The authors believe that further research may be necessary to establish how crypto assets other than cryptocoins, including non-fungible tokens, should be treated in the event of a chain split. [ABSTRACT FROM AUTHOR]

This article focuses on the predicament of owner-occupiers and small investors presently liable for the removal of combustible cladding on build-to-sell residential high-rise. We argue that while the proliferation of combustible materials has been shaped by cost-cutting and risk-shifting by construction firms, these practices did not on their own transfer the responsibility of remediation to consumers. Examining the attempts of one densifying nation, Australia, to locate responsibility for combustible cladding through two parliamentary inquiries, we analyse witness testimonies to show how public policies encouraged materials substitution, removed on-site inspection and protected corporations from litigation. Moving beyond neoliberalism, these policy reforms leveraged information asymmetries and the material complexity of residential high-rise to create a climate of "imperceptibility" towards unsafe materials. Together, material, financial and policy dimensions intersected to enable capital accumulation through the expansion of consumer harm in high-rise housing markets. We conclude that construction materials and processes are an overlooked, yet critical domain of governance in financialised housing regimes. [ABSTRACT FROM AUTHOR]

The taxation of capital gains in Australia involves a suite of concessions for small business owners and a related concession for superannuation fund investments. These concessions are part of the taxation regime for three principal reasons: to stimulate small business investment in active assets, to stimulate the selfsufficiency of Australian retirees, and to create horizontal equity between explicit superannuation complying savings funds and de facto retirement savings implicit in the capital of small businesses. By removing the concessions extended to the capital gains of complying superannuation funds, a central part of the case for small business concessions is also removed. The case is made that the key arguments linking savings to investment to capital formation and associated social premiums in terms of increased economic growth are fundamentally flawed and, as economic efficiency is not materially enhanced by such concessions, the core case for these capital gains preferences fails. The argument from horizontal equity between complying superannuation funds and small business capital gains is essentially a “rider” to the argument from economic efficiency. If the economic argument fails, it follows that the horizontal equity considerations can readily be redressed by the elimination of both preferences. Furthermore, the small business capital gains tax concessions primarily benefit wealthier taxpayers, and in doing so, fail to improve the fiscal sustainability of Australia’s superannuation system. Based on these arguments, capital gains preferences extended to small businesses and superannuation funds should be removed, with no or negligible cost and considerable enhancements in tax system simplicity, revenue base integrity, economic efficiency and fiscal adequacy. [ABSTRACT FROM AUTHOR]

Northern Australian pastoral land prices have become higher and more volatile over the last twenty years, raising concerns about the potential implications of the financialization of the industry. These prices are not inevitable results of market forces, but mediated and co-constructed by a range of actors using two valuation devices: the 'Beast Area Value', a 'rule of thumb' which emerged during the early development of the industry, and the 'Return on Investment', a tool widely used to compare financial ventures. The Beast Area Value treats land as a commodity whose value is derived from its physical characteristics, while the Return on Investment treats land as an asset whose value is based on its future income generation potential. This article describes how some pastoral companies are strategically combining these devices to earn capital gains through 'speculative development' of properties in ways that do not necessarily increase their productivity. It argues that pastoral land is often developed in ways more reflective of the valuation devices used in the region than of the realities of station management, representing a shift from competing in the sphere of production to competing in the sphere of valuation and implicating these devices in the financialization of Northern Australian land. [ABSTRACT FROM AUTHOR]

Using regional level panel data of three developed countries, comprising Australia, Canada, and New Zealand, the study investigates the response of consumption smoothing to housing capital gains. The consumption smoothing model first revisits the theory of perfect risk sharing. After rejecting a full consumption smoothing hypothesis, the results strongly indicate that the appreciation of house values smooths consumption further. For the sake of comparison, analysing three developed economies reveals the diversification in the response of consumption to long-run output shocks. Canadian residents appear to be more sensitive to permanent domestic output shocks while Australian's consumption pattern remains unchanged. [ABSTRACT FROM AUTHOR]

Over the course of almost a decade, the ATO has been consistently focused on ensuring that foreign income of Australian residents is taxed correctly in Australia. TA 2021/2 is the latest initiative by the ATO in its focus on ensuring that Australian residents are assessed for tax on all of their worldwide income. TA 2021/2 highlights the ATO’s concerns with certain arrangements where Australian resident taxpayers derive income or capital gains (foreign assessable income) offshore, but fail to declare the foreign assessable income in their Australian income tax returns due to the characterisation of the funds as a “gift” or “loan” from a related overseas entity. It is essential that taxpayers obtain sufficient evidence to prove that their loan or gift is genuine or they should seek professional advice. [ABSTRACT FROM AUTHOR]

The streaming regime in Subdivision 115-C ITAA97, which was enacted after the High Court's decision in Commissioner of Taxation v Bamford (2010) 240 CLR 481 ('Bamford'), is an integral component of the taxation of trusts in Australia. The main purpose of the 2011 measures was to ensure that the streaming of capital gains (as well as franked distributions) to specific beneficiaries would be effective for tax purposes as the Government had assumed that the 'proportionate approach', which was confirmed in Bamford, necessarily implied an inability to stream particular categories of income. Although the Government intended to appraise Subdivision 115-C ITAA97 after a broader review of the taxation of trusts, more than nine years later, this has not taken place. The current regime is highly problematic due to its extreme complexity, with evidence that it is largely inaccessible to both the profession and scholars. This paper critically evaluates the streaming regime by first considering whether streaming was precluded under the previous law (as assumed), and then considering the application of the current regime to a series of examples that cover key scenarios of interest. Centrally, this paper aims to show that the streaming regime in Subdivision 115-C is unnecessarily complex. It is also shown that the regime leads to some anomalous outcomes. Improvements are suggested by outlining ways in which streaming could be accommodated by simpler processes that also more consistently give effect to the entrenched policy of ensuring a reasonable nexus between beneficiaries' distributable income and assessable income. [ABSTRACT FROM AUTHOR]

The Australian tax system differentiates between residents and non-residents. In the context of fairness, those who contribute to the system should also benefit from the system. As non-residents are typically unable to benefit from government spending in the same way as residents, many would consider it only fair that these individuals are not subject to the same scope of taxation as those who reside in Australia. With this in mind, parliament introduced Div 855 ITAA97. The effect of Div 855 is relatively simple. It seeks to narrow the range of assets that are subject to Australian capital gains tax for foreign residents. While the intent of the provisions is apparent, that is, foreign residents should not be subject to Australian tax on non-taxable Australian property (TAP) assets, the complexity arises where a foreign resident receives a distribution of a non-TAP capital gain via a resident discretionary trust. [ABSTRACT FROM AUTHOR]

In part 1 of this article, we noted that draft taxation determinations TD 2019/D6 and TD 2019/D7 raise important considerations in international tax planning and the structuring of Australian investments, with capital gains (whether foreign-sourced or not) attributed to a foreign resident beneficiary of an Australian resident trust being assessable to that beneficiary unless the trust is a fixed trust. In part 2, we delve into the international tax planning issues that the draft taxation determinations create, particularly in relation to Australia's international tax treaty obligations, and the potential impact that these determinations could have in how cross-border investments are structured. [ABSTRACT FROM AUTHOR]

TD 2019/D6 and TD 2019/D7 raise important considerations in international tax planning and the structuring of Australian investments, as all capital gains (whether foreign-sourced or not) that are attributed to a foreign resident beneficiary of an Australian resident trust are now assessable to that beneficiary, unless the trust is a fixed trust. The draft determinations are contentious due to a disconnect between the relevant legislative provisions and the ATO's interpretation of them, and as they do not address Australia's double tax agreements. Further, they lead to differing tax outcomes for foreign residents assessed on capital gains from the disposal of non-taxable Australian property, depending on the structure through which they derive that gain. Consequently, foreign resident taxpayers require more clarity on this aspect of Australian tax law. [ABSTRACT FROM AUTHOR]

This study examines the links between investor residency, tax status and the corporate ownership structure of Australian listed companies. We find that there is a preference by resident individuals, corporate companies and superannuation funds to hold a significantly higher proportion of shares in companies that pay fully franked dividends, relative to other companies. Furthermore, our results show that non-resident investors, in general, hold a significantly higher proportion of shares in companies that pay either unfranked or partially franked dividends, relative to other companies. Finally, there is some evidence that resident individual investors hold a significantly higher proportion of shares in capital appreciating, as opposed to dividend paying, companies, which is consistent with resident individuals seeking to utilise the tax concessions they are afforded on long-term capital gains. Overall, these findings are consistent with the notion that the tax system in Australia, whereby capital gains tax and dividend imputation operate in unison, may contribute to the creation of clienteles of investors that are attracted to companies on the basis of their payout policy. This has important implications at both the company-level, with respect to companies that are considering the impact of a change in payout policy on the composition of their share registry, as well as at the national-level in terms of the potential impact of changes in the taxation system on the willingness of non-resident investors to invest directly in the Australian stock market. [ABSTRACT FROM AUTHOR]

Selling a business is a complex process where the to and fro between the vendor and purchaser can give rise to equally complex matters of timing and taxation. Identifying the correct time of the capital gain in relation to the sale of business can lead to significant tax considerations. Determining the right time of the capital gain, however, is not always a simple matter. The difficulty arises from complex business sale processes due to the presence of a heads of agreement, conditional clauses in the business sale contract, and where variations to the executed business sale contract have occurred. This article provides guidance on the potential CGT implications of entering a heads of agreement in respect of a business sale, the existence of conditional clauses in a business sale contract, and the occurrence of any variation to an executed business sale contract. [ABSTRACT FROM AUTHOR]

In recent times, there has been an explosion in testamentary trusts. Due to the significant income tax and capital gains tax advantages, it is common for a will to create trusts over property on death, rather than having a disposition to the beneficiaries. At the heart of trusts is the duty of trustees to invest. Trustees are armed with power and may invest at their discretion but must act in the best interests of their beneficiaries. They must act impartially and exercise the care, diligence and skill that a prudent person would exercise when investing for others. Trustees must also take into account the factors set out in the Trustee Act while acting. As such, the obligation on trustees to invest is one of the most difficult tasks for trustees to perform. This article sets out the basic components of the duty of trustees to invest. [ABSTRACT FROM AUTHOR]

A recent high-profile case litigated in the Federal Court promised to provide much needed judicial guidance on the availability of capital gains tax relief to temporary and foreign resident beneficiaries of Australian resident trusts. Additionally, it was expected that the scope of the role of s 115-215 of the Income Tax Assessment Act 1997 when assessing trust beneficiaries would be clarified by the decision. Following settlement of the dispute, these issues now must await fresh litigation. Perhaps this is to be expected, given the dismal state of the broader taxation legislation that applies to trusts. The plethora of rule changes over the last 20 years, accompanied by ambivalent text in explanatory memoranda, have left the area ripe for reform. This article explores the trust tax issues at stake in the Oswal case and the submissions put by the parties to the court, as well as the policy issues surrounding the availability of the CGT jurisdictional exemptions more generally. [ABSTRACT FROM AUTHOR]

If a business commenced before the introduction of the CGT regime on 20 September 1985, this does not in itself mean that any capital gain from the disposal of the goodwill attached to that business will be disregarded. Similarly, a liquidation distribution representing the gain on the disposal of the goodwill of a pre-CGT business may not necessarily be a tax-free distribution. This article considers the ways in which the capital gain from the disposal of goodwill of a pre-CGT business may be subject to taxation. In particular, this article provides guidance on how to manage the "essential nature or character" of a pre-CGT business, the application of Div 149 and CGT event K6 of Subdiv 104-K of the Income Tax Assessment Act 1997 (Cth), and the implications for pre-CGT goodwill under the various CGT roll-over provisions as relevant to both advisers and liquidators. [ABSTRACT FROM AUTHOR]

For income years starting on or after 1 July 2011, the research and development (R&D) tax incentive replaced the R&D tax concession. The new rules seek to provide more generous benefits and make a clearer, better targeted definition of what are eligible "R&D activities". With the R&D tax incentive rules now in place for over four years, the key provisions relating to "new knowledge", how to establish the current "state of knowledge", and the "scientific method" are becoming more certain as recent cases confirm how the provisions operate, and which parts of the old tax concession can continue to be relied on. This article analyses the core R&D eligibility criteria required for an applicant to prove that their activities are eligible R&D activities. [ABSTRACT FROM AUTHOR]

This article proposes the abolition of the 50% capital gains tax (CGT) discount for personal taxpayers and its replacement with a non-cumulative annual tax-free threshold for the taxation of capital gains. This reform, it is argued, would considerably enhance the equity, efficiency and simplicity of the Australian CGT regime, as well as providing a positive revenue outcome for the Treasury. [ABSTRACT FROM AUTHOR]

Atkinson et al. (J. Econ. Lit. 49( 1):3-71, 2011) survey an important new literature using income-tax-based data to measure the share of income held by top income groups. But changes in tax legislation that expand the tax base to include income sources (e.g. capital gains, dividends, etc.) disproportionately held by these groups will conflate such an expansion with an increase in the share of income they hold. We provide a cautionary tale from Australia of how comprehensive tax reform legislation in 1985 substantially altered Australian top income series, especially those that do not separate taxable realized capital gains from other taxable income. Drawing on the Household, Income and Labour Dynamics in Australia (HILDA) Survey we then estimate the size and distribution (across income groups) of taxable realized capital gains in 2006 and 2009, and compare these results with those using accrued capital gains, finding substantially different distributions. More importantly, we find substantial differences across our measures in how capital gains changed between 2006 and 2009. Our results suggest that yearly taxable realized capital gains, often included in studies of top incomes, might be a poor proxy for the theoretically more appropriate yearly accrued capital gains. [ABSTRACT FROM AUTHOR]

This article reviews the literature from the United States on capital gains realisation response studies. The studies reviewed use the econometric technique of regression analysis to estimate the responsiveness of capital gains realisations to tax rates, and this is reported as an elasticity point estimate. The literature review reveals that the use of cross-sectional tax return data for only one tax year is the least preferred of three data types considered. In concluding, the article considers the implications of the reviewed literature for a forthcoming Australian study on capital gains realisation response. [ABSTRACT FROM AUTHOR]

The article offers information on several matters related to taxation in Australia that need to be attended after June 30, 2017. Topics discussed include the need for a trustee to send a notification of entitlement for a tax exempt entity, the failure to duly pay or notify an exempt entity, and the entitlement to capital gains.

The article discusses the impact of newly proposed pension tax on members and some of the anticipated trends and planning measures in Australia. It informs that under the proposed changes, earnings related to assets supporting pensions that exceed 100,000 Australian dollars per member per financial year will be taxed at 15 percent. The proposed new pension tax will affect superannuation fund members and the members who have realised capital gains.

Australia draws from both the OECD Model tax treaty and the UN Model when negotiating its tax treaties. While the two Models are similar, the OECD Model tends to favour capital exporting nations by shifting more taxing rights to the country in which investors reside and the UN Model tends to favour capital importing nations by allowing source countries to retain more taxing rights. Australia is an active member of the OECD and generally its treaties follow the OECD Model. However, Australia shifts to greater reliance on the UN Model when negotiating Articles that cover the types of income generated in sectors in which Australia relies more heavily on imported capital. This paper looks at relative influence of the OECD and UN Models on four key areas of Australia's tax treaties. These are articles that cover income derived by nonresidents as business profits of a permanent establishment, capital gains from the sale of Australian assets, investment income (interest, royalties and dividends), and "other income" not otherwise specified in the treaties. It considers the factors that may have influenced Australia to follow one Model or the other or neither in the negotiation of these treaty measures. [ABSTRACT FROM AUTHOR]

We calibrate the effect of Australia's Capital Gains Tax (CGT) on share prices and market activity. Based on a large sample drawn from all listed Australian companies for the years 1994-2007, we find significant tax-loss selling (TLS) of shares that lost value over the financial year, which is reflected in unusually high trading volume and more sell orders in June and a rebound in July. There is some evidence that small mining stocks are particular targets for TLS. Interestingly, the 1999 CGT reforms, which introduced concessions for long-term capital gains, did not reduce the incidence of TLS. [ABSTRACT FROM AUTHOR]

There is a high degree of complexity involved in the interaction of CGT event E4, the calculation of the non-assessable part of a trust distribution in s 104-71, the gross up rules for capital gains flowing through trusts in s 115-215; the operation of the CGT discount rules in Div 115, the application of the small business concessions in Div 152; and the operation of the rules for applying capital losses and net capital losses against capital gains. Moreover, these rules potentially affect any investor in a unit trust. This article reviews the academic literature concerned with definitional and conceptual issues in tax law complexity, and then examines a series of examples illustrating the interaction of various causes of tax complexity in the operation of CGT event E4. An attempt is then made to redraft CGT event E4 and associated sections with a view to reducing the degree of complexity involved in their operation and interaction. The conclusion is reached that, while complexity is inevitable when income and tax preferred capital gains flow through an intermediate entity, redrafting these provisions in a manner which makes the policy intent of provisions and their constituent elements and their relationship to other provisions more apparent could some remove some unnecessary complexity in their interaction. [ABSTRACT FROM AUTHOR]

In a dividend imputation tax system, equity investors have three potential sources of return: dividends, capital gains and franking (tax) credits. However, the standard procedures for estimating the market risk premium (MRP) for use in the capital asset pricing model, ignore the value of franking credits. Officer (1994) notes that if franking credits do affect the corporate cost of capital, their value must be added to the standard estimates of MRP. In the present paper, we explicitly derive the relationship between the value of franking credits (gamma) and the MRP. We show that the standard parameter estimates that have been adopted in practice (especially by Australian regulators) violate this deterministic mathematical relationship. We also show how information on dividend yields and effective tax rates bounds the values that can be reasonably used for gamma and the MRP. We make recommendations for how estimates of the MRP should be adjusted to reflect the value of franking credits in an internally consistent manner. [ABSTRACT FROM AUTHOR]

This paper studies the interaction between negative gearing and three capital gains tax regimes – the current Australian system, the one that prevailed between 1985 and 1999 and a realisation tax that mimics an accruals tax. We report estimates of the effective rates of income tax for each regime in two scenarios – slow anticipated real capital gains and very rapid unanticipated real capital gains. We conclude that negative gearing should be retained and capital gains taxation reformed to approximate an accruals tax. This desirable package would be no harder to administer than the current regime. [ABSTRACT FROM AUTHOR]

Persons who receive distributions of surplus assets in the liquidation of Australian companies may be liable to taxation under either the deemed dividends or capita! gains regimes. The deemed dividend regime is now nearly 80 years old and contains many anomalous features. Inappropriately, the legislation prominently excludes the once tax-free, "capital" class of surplus distributions. Several tax jurisdictions comparable with Australia have legislation which is similar. High Court judgments over the years have invented a "character" for liquidation distributions and interpreted that legislation in ways that ill accord with modern commerce. Statutory amendments have not removed all the unhelpful judicial glosses that have intruded. By contrast, the capital gains regime has fewer fictions and better reflects the general law nature of liquidation surpluses. However, a further anomaly arises from the manner by which capital gains are subordinated to deemed dividends for the avoidance of "double taxation" In this article suggestions are made for the drafting of an improved code for the future taxation of liquidation surpluses. [ABSTRACT FROM AUTHOR]

Part 1 of this article was published in the September issue of Australian Tax Review. This Part of the article discusses the amendments relating to the royalties, alienation of property, limitation on benefits and other income Articles. The amendments to the royalty Article are particularly significant because Australia has not previously agreed to a rate below 10%, and usually insists on treating equipment rentals as royalties. The amendments to the alienation of property Article are also significant because they reiterate Australia's commitment to taxing the Australian source capital gains of non-residents, and contain some helpful provisions in relation to expatriates. The limitation on benefits Article is exceptionally complex and it remains to be seen how it will be applied in practice in Australia. [ABSTRACT FROM AUTHOR]

The paper examines the distribution of capital gains and the net benefits of homeownership in terms of the debate between Marxists and Weberians on how homeownership modifies class inequality. Capital gains and net benefits are measured using unit record data from valuation records of the 1980s and a survey carried out by the Australian Institute of Family Studies in 1991 of over 2500 families in Sydney and Melbourne. Higher socio-economic groups generally had significantly larger dollar gains than groups below them and, by this measure, homeownership adds to inequalities generated through the labour market. However, because they had commenced purchase with smaller deposits, the low socio-economic groups did as well or better than other groups when capital gains are expressed as a percentage return on deposits. Capital gains are one of the variables included in a measure of net housing benefits; an attempt to quantify all the major benefits and costs involved in purchase rather than renting. The net housing benefits accruing to different socio-economic groups since deregulation of finance markets are compared using survey data relating to the 1980s property boom, and estimates using the much lower rates of interest and capital gains in housing markets of the 1990s. Again, there is a strong association found between dollar benefits and socio-economic status. The paper concludes that, measured in dollar terms, the distribution of net housing benefits in Sydney and Melbourne has had a substantial class bias since deregulation, tending to create a more unequal society. [ABSTRACT FROM AUTHOR]

The article discusses the concept of settlement in relation to the operation of the capital gains tax (CGT) provisions of the Income Tax Assessment Act of 1997 following the decision of the Full Federal Court in the Taras Nominees case. Topics covered include details of the federal court case involving the Taras Nominees and some of the revenue issues encountered like the refusal by the Victorian State Revenue Office to exempt land transfers from stamp duty and the potential incidence of CGT.

Provides an empirical assessment of the inflated effective marginal tax rates (EMTR) which result from the taxation of capital gains in Australia. Mechanism by which the tax treatment of capital gains creates inflated EMTR on other taxable income; Number of taxpayers affected in 1996-1997; Impact on government revenue of an alternative tax treatment of capital gains.

In the latest official national income publication the Australian Commonwealth Statistician has altered the treatment of stock appreciation in the measurement of national income at current prices. Previously, stock appreciation had been included in both national expenditure and national product. Now the amount of stock appreciation (the difference between the change in the value of stocks and the value of the change in stocks) has been deducted from investment in stocks, and consequently national expenditure, and from trading incomes, and consequently national income. The former procedure (including stock appreciation in national expenditure and national product) had been advocated by the present author, when editor of the first official national income publications issued by the Commonwealth Statistician. In this note an attempt is made to set out the reasons for this view. A new approach is also suggested for handling the item of stock appreciation in national income accounts, which does not rest on the assumption that stock appreciation is a capital gain which should be excluded from trading incomes and national product. [ABSTRACT FROM AUTHOR]

The article discusses liquidation issues following the payment of the Div 152 retirement exemption in the case of a private company in Australia that has been placed into a members' voluntary liquidation. Topics covered include the cash received from the sale transaction, the capital gain made by the private company and the view of the Commissioner on a dividend paid out of profits.

• Static economic models imply landbanking does not exist as land is costly inventory. • Extensive landbanks of 200,000 housing lots are held by eight housing developers. • Zoned supply is found to be unrelated to the rate of new housing supply. • Housing developers routinely delay housing production to capitalise on market cycles. • Planning policy changes may not produce desired housing supply effects. Many housing policies aim to increase supply and reduce prices through rezoning, relying on the assumption that increasing allowable densities automatically accelerates the rate of housing supply. However, the existence of landbanking (land hoarding), where land able to be profitably developed for housing is withheld from the market in anticipation of future gains, undermines the logic of such policy changes. We expose major limits of the static housing supply model behind these policies by looking at the degree to which landbanking behaviour is consistent with model predictions. To do this, we assemble a new dataset of home sales and landbanks from the annual reports of Australia's top eight publicly-listed residential developers from 2001 to 2018 and use complete state-level planning approvals and lot production data in Queensland, Australia. In contrast to the static model prediction that landbanks serve the function of inventories, and are hence minimised, we find that (1) over 200,000 housing lots, or 13 years of new supply, are held by the eight largest housing development companies, and eight years of these landbanks are held in housing subdivisions that are approved and already for sale, that (2) the amount of zoned supply in a region is unrelated to the rate of new housing supply, and that (3) housing developers routinely delay housing production to capitalise on market cycles. Dynamic incentives to maximise total returns, including capital gains in the option value of undeveloped land, could be related to this observed behaviour. [ABSTRACT FROM AUTHOR]