Some of that 7.25 per cent comes from improvements – the renovations and extensions – but the land itself is where the real value tends to lie. And land's appreciation is effectively a windfall gain for the owner. If there's any title to some return on the rising value of land, it should be the society that causes the appreciation through making a location more desirable through the opportunities, services and demand society provides.

Of course that 7.25 per cent figure is nominal and some decades run much harder than others and some pockets do better and some worse – but that's the big picture reality of tax-free owner-occupier capital gains.

What the immediate response to a highly visible 1.3 per cent land tax proposal doesn't see or perhaps want to hear is putting it in the context of land values and overall taxation. One of the ways to make land tax bearable for those who can't imagine being able to pay is to capitalise it – let it run and come out of the eventual sale proceeds. According to a Reserve Bank paper on long-run trends in housing prices , Australian house price growth has averaged 7.25 per cent a year over the past 30 years. Reducing that to 5.95 per cent hardly sounds like cruel and unusual taxation, especially when the family home is presently a tax haven.

The South Australian government's HomeStart finance helped one in eight first home buyers into ownership in South Australia in the last 28 years.

That's particularly the case when the state improves infrastructure in an area. Stick in a new train line and those owning land reasonably close to the station win a lottery without buying a ticket. The state gets no share of that win to help pay for the infrastructure improvements we need. Ditto providing a good school, hospital and parklands.

Conversely, the closest house not resumed for a new freeway is unfairly penalised by a loss of value. Similarly, when the heritage commissars damage an individual's property rights by imposing an heritage order, the society that wants such things should be up for a share of the costs. If we started to take the "value capture" buzzword seriously, there should be avenues to compensate as well as to share the value uplift that helps provide the infrastructure that increases value in a virtuous cycle.

A sensible land tax, as proposed in the Henry Review last decade, would be part of that value capture mechanism. Yes, we would feel it, we would see it and it would hurt – but that's not necessarily a bad thing compared with the status quo of the community being unaware of the less obvious but more damaging tax.

It's worth repeating: the NSWBC/NCOSS study is revenue neutral, we are already collectively paying those amounts but on a less equitable basis. The land tax already levied on commercial properties is eventually paid by consumers – the prices charged in a shop include the cost of the shopping centre's land tax – but the punters baulking at a more visible land tax don't realise that.

Introducing a no-exemptions land tax would be complicated, the issues complex and beyond this space to begin to canvas, but Henry had it pretty much right. It makes more sense as part of a total reform package, but with that being beyond our politicians, it would still be an improvement.