A mid-year budget review revealed the South Australian government is overly reliant on property taxes and needs to broaden its tax base, the Real Estate Institute of SA (REISA) has claimed.
“As real estate professionals, we know the past year has been tough for homebuyers so it’s no surprise to see the state’s coffers feeling the pinch of lower sales volumes,” REISA president, Mr Greg Moulton, said.
“In tough times, it really highlights the state government’s reliance on property taxation is not sustainable and a review of state taxation is needed.”
Mr Moulton made the comments following the SA government's mid-year budget review last week, which revealed shortfalls in expected revenue on the back of a slow property market.
“Property tax comes from such a small base, but contributes such a large amount to the state’s revenue annually,” he continued.
“When you consider that the state generally collects around $4 billion in taxes annually and the property market accounts for at least a third of that, the need for reform is clear.”
“In tough economic climates, property tax and GST revenue will always suffer, as people spend less and generally buy and sell less.”
Mr Moulton said the government’s planned spending cuts “seemed fair in tough times”.
“I know that homebuyers and real estate professionals have really felt the impact of the slower housing market and they are watching every dollar carefully, so it is encouraging the state government is doing the same.”
“What we will be watching is that staff cuts aren’t made in areas such as the Residential Tenancies Tribunal and service departments which assist consumers as they buy, sell and lease real estate.”
“Housing is a basic human need and people need to the certainty that essential services won’t be cut.”