Land tax is payable in Queensland on properties valued over a certain threshold. The Queensland Office of State Revenue can approve land tax exemptions for a range of reasons that include landowners’ principal place of residence and business of primary production. Once claimed, the exemption continues to apply indefinitely, which is appropriate as long as landowners are entitled to continue to claim the exemption. However, landowners who claim the exemption are obligated to inform the Commissioner of any change in their circumstances, as their exemption may be no longer valid, and they may in fact have a land tax liability.

The motivations for people not meeting their exemption obligations had never been investigated. It was assumed that the majority of landowners who failed to report a change in their circumstances had not remembered to update their status, and were not deliberately trying to mislead the Office. As such, the Office wanted to reach out to their clients and ask them to clarify their tax exemption status.

The trial involved sending letters to over 12,000 people who currently claim a land tax exemption, encouraging them to update their exemption status. Behavioural insights were used to develop three different letter designs:

• Salient design: emphasised the key action required; made the language direct and active; signed electronically by an officer with a personal email address; mention of future fines; required return date added.
• Sticker design: The salient letter but with an image of a coloured post-it sticker on the letter saying “Thanks for your help!”
• Easy return design: A form that allowed for a simple tick next to a range of response options with a reply paid envelope.

By randomly assigning the population to receive a traditional, control letter or one of the three new designs and comparing response rates, we were able to measure the impact of each type of letter.

Although a range of past studies across the world were consulted for guidance, the UK’s Behavioural Insights Team’s MINDSPACE and EAST frameworks provided the overarching guides for the trial reported in this paper. These frameworks were systematically applied to the proposed intervention of sending a letter to the exemption claimants.

Salient design: emphasised the actions required

Sticker design: added an image of a coloured post-it sticker

Easy return design: easy to fill check-boxes accompanied with a reply paid envelope

The new letters were very successful at encouraging exemption holders to contact the Office and to change their details as shown in the diagram below. A randomized evaluation showed that 5.3% of people responded to the control letter, which was far less than the 24.8% who responded to the salient letter, 22.4% who responded to the sticker letter and 21.8% who responded to the easy return letter. This change was achieved with very little additional cost, as a traditional letter would have been sent out to all recipients anyway.

The number of responses that led to a change in circumstances—essentially a change to tax exemption status—was different between each of the treatment groups, as shown in the top part of the bars in the graph. Interestingly, the control group demonstrated the greatest proportion of changed status, though the difference between groups was not statistically significant. However, the greatly increased response rates from the other letters means that the absolute numbers of changed responses are still much higher in the intervention groups, and thus any future communication from the unit would still be better off using an intervention letter.

Inspired to implement this design in your own work? Here are some things to think about before you get started:

• Are the behavioral drivers to the problem you are trying to solve similar to the ones described in the challenge section of this project?
• Is it feasible to adapt the design to address your problem?
• Could there be structural barriers at play that might keep the design from having the desired effect?
• Finally, we encourage you to make sure you monitor, test and take steps to iterate on designs often when either adapting them to a new context or scaling up to make sure they’re effective.

Additionally, consider the following insights from the design’s researcher:

• This is a low cost intervention, particularly if letters are already being sent out as the interventions can just replace some of the original letters.
• Allow enough staff time for a high volume of queries – some people may be concerned about receiving communications from an official agency, and may just want to check everything is all right. You can use the opportunity to update their contact details.

For more guidance on implementing this design, choose “I want to try this” from the left drop-down menu.