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Revenue from property taxes has boosted state and local government bank accounts, with the latest Australian Bureau of Statistics data showing governments nationally collected $49.567 billion or 51.9 per cent of their total taxation revenue from property.
Stamp duty on conveyances accounted for the largest overall proportion of property tax revenue. Over the 2015-16 financial year, state and local governments raised $20.607 billion in revenue from stamp duty, accounting for 41.6 per cent of total property tax revenue, according to the latest CoreLogic Property Pulse.
CoreLogic research analyst Cameron Kusher said revenue collected from stamp duty has increased substantially in the last few years.
“It is pretty easy to see what booming housing markets do for state government coffers with the NSW and Vic governments seeing stamp duty revenues surge,” Mr Kusher said.
“Of course, when the housing market isn’t booming, it has a substantial impact on stamp duty revenue, see NSW and Vic in 2008-09 and WA more recently.”
Mr Cameron warned that stamp duty’s dependence on stock turnover makes it an inefficient, and volatile, source of taxation revenue.
“Because stamp duty is only collected from properties which transact, the state governments are relying on values and transactions rising across the 5 to 7 per cent of properties which turnover in any given year to drive their major source of property tax revenue.”
Mr Kusher said land tax, municipal rates and stamp duties on conveyances accounted for 90.3 per cent of all property-related tax revenue to state and local governments in 2015-16.
“Land taxes and municipal rates are much more guaranteed income streams than the more volatile stamp duty on conveyances,” he said.
“For this reason, it would make sense to move from stamp duty to a much more efficient, easier to collect and holistic land tax.”
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