WA and NT see greatest property tax drops

WA and NT see greatest property tax drops

Posted on Friday, April 20 2012 at 10:55 AM

Despite a slump in the Australian property market and tax revenue over the 2010-11 period, property owners paid $3 billion in property-related taxes, according to RP Data’s Cameron Kusher.

The 47.3 per cent in tax revenue
for state and local governments over the 2010-11 financial period was a drop
from 48.2 per cent the year before, however the total property-related tax
revenue across all governments increased by 4.6 per cent over the year, said

The total value of residential
property transactions in 2010-11 fell by 17 per cent, he said.

Capital city property values
fell by 1.4 per cent and transactions were down by 20 per cent compared to the
previous year.

The three big property tax hits
representing 93 per cent of total property tax revenue to the local and state
governments are through municipal rates (up by 6.9 per cent over the 2010-11
period), then land taxes (up by 4.1 per cent), and stamp duty on conveyances
(up by 0.3 per cent).

Because of reduced property
transactions in recent years it’s clear that the stamp duty tax revenue has
seen a fall, said Kusher.

However the stamp duty has risen
over the 2010-11 period due to increases in New South Wales and Victoria. In
other states stamp duty revenue has fallen in the same period; 14.1 per cent
lower than its record level of $14.3 billion in 2007-08.

“Considering that since the end of the 2010-11 financial year property
values and transaction volumes have continued to fall, we would expect that in
order to grow tax revenue, state and local governments may be looking to again
increase land tax and municipal rates as there is likely to be limited (if any)
growth in stamp duty revenue,” Kusher said.

Each state and territory saw
varied changes over the 2010-11 period, with the Australian Capital Territory
recording a 14.2 per cent increase and Victoria a 10.7 per cent increase.

However in the same period
property tax revenue fell in Western Australia and the Northern Territory (both
by 9.6 per cent), and in Tasmania by 1.9 per cent.

In regards to land tax and
municipal rates, Victoria saw the greatest increases (18.7 per cent), followed
by the ACT (12.5 per cent), while Tasmania saw the biggest decreases (-17.6 per
cent), followed by Tasmania (-1.9 per cent).

Kusher said property-related tax
growth is likely to remain minimal over the coming year and it’s likely the
governments will attempt to make adjustments to inject artificial growth in tax

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