A prominent industry analyst has called for universal land taxes to be introduced after new figures by the Australian Bureau of Statistics revealed that the majority of state and local government taxation revenue is coming from the property market.
According to CoreLogic RP Data's Cameron Kusher, the latest ABS report into government taxation for the 2014-15 financial year showed 50.6 per cent of taxation revenue was from property.
“While total tax revenue increased 7.0 per cent over the year, property tax revenue increased by 10.5 per cent, highlighting that property taxes are the largest source of taxation revenue for state and local governments and are rising at a rapid pace,” Mr Kusher said.
“Interestingly, since the 1999-00 financial year, total state and local government taxation revenue has increased by 103 per cent compared to a 150 per cent increase in property taxation.
“Again, this highlights the importance of property taxes for these two levels of government.”
Mr Kusher said the two largest sources of tax are stamp duties on conveyancers and public rates which account for 40.8 per cent and 35.4 per cent of total tax revenue respectively.
Another significant source of tax revenue is land tax, which accounts for 14.8 per cent of total revenue.
On a state-by-state basis, stamp duty has been the largest source of tax revenue in New South Wales, Victoria and the Northern Territory, while in all other states public rates has been the largest source of tax revenue, Mr Kusher noted.
NSW experienced the largest surge in stamp duty revenue – up 98 per cent over the five years to 2014-15.
“Property taxes are the most important sources of revenue for state and local governments. However, the reliance on volatile stamp duty revenue provides challenges for these governments,” Mr Kusher said.
“There is a good reason to advocate for the replacement of stamp duty with universal land taxes.
“Although no one likes a new tax, it provides more revenue certainty to local and state government, and it doesn’t deter the buying and selling of properties like stamp duty’s impost can.”
[Related: New land tax 'not politically feasible']