Government taxes on the residential property market have ballooned to a record $15.1 billion, according to the Australian Bureau of Statistics’ Taxation Revenue report.
The latest ABS figures show total property tax revenue, including the commercial property sector, were $24.1 billion in the 2004/2005 year.
For residential property, the combined revenue from council rates, land tax and stamp duty swallowed $15.1 billion – up $105 million on 2003/04.
HIA’s executive director of housing and economics Simon Tennent said the taxes continue to rise, despite a nationwide slowdown in the property market.
He added that the combination of bracket creep and higher than CPI increase in council rates, have pushed housing out of reach for tens of thousands of families on middle to low incomes and kept the squeeze on family budgets.
“While State Governments have been complaining about falling property revenues, the latest figures for housing show that revenue has increased.
“These figures are entirely consistent with the recent Warburton-Hendy report which despite revealing that Australia was a low tax country overall, went on to clearly demonstrate Australia’s very poor record on property and transaction taxation.
“When comparing the levels of property transactions to the ABS figures, the number of property transactions per $1 m of tax revenue has plummeted from 59 in the year 2000 to only 38 in 2005,” Tennent said.
“With housing affordability stuck at near record lows, to be labelled the highest stamp duty taxing nation in the world is not only unacceptable, but highlights the need for urgent reform.
“In particular, immediate reforms to the tax treatment of newly built housing would reduce prices by between $20,000 and $50,000 by removing the compounding effect of stamp duty, and removing the insidious charges for community and transport infrastructure,” he added.
Tennent said governments should reduce their reliance on property taxes, with the forecast of stronger than expected GST revenue.
He said this would have immediate and measurable flow on effects by improving housing affordability, and putting a stop to the fall in homeownership rates among the key 25-39 year old age group.
By Kathryn O’Meara