State and local governments collected over $30 billion in property taxes in 2017-2018 – up by $9 billion over five years. This latest Australian Bureau of Statistics data underpins the need for comprehensive reform of the federal, state and local tax systems when it comes to property, according to the Property Council of Australia.
Property taxes such as stamp duty, for instance, are inefficient and make housing much less affordable, said Property Council of Australia Chief Executive Ken Morrison.
“They can account for anywhere up to one-quarter of the cost of a property purchase in our major cities,” he said.
Morrison also warned that while property taxes are a “sugar hit” for state and local government when markets are booming, they can also eat into budget bottom lines when the markets cool (similar to what is currently happening in Melbourne and Sydney).
“We need a roadmap for reform in the medium term that focuses on taxes which are productive, competitive and sustainable,” Morrison said.
Local government relies exclusively on property taxes, while state governments get nearly 14% of their tax revenues from property. These figures do not include the property industry’s contribution through company tax, capital gains, goods and services tax, and payroll taxes.