Revenue from property transactions accounts for 51.9% of total tax revenue for local governments
Latest figures from the ABS (Australian Bureau of Statistics) in relation to taxation data for the 2015-16 financial year show that $49.5b in property taxes were collected by state and local governments. This was 9.6% higher over the year and is a new record tax take.
The largest contributor to this was stamp duty on conveyances (the stamp duty charged for buying a property), which is likely one of the main reasons that states have been reluctant to decrease stamp duty charges despite public and pressure from the real estate industry.
Across the 2015-16 Financial year state and local governments raised in excess of $20b (Yes. Billion!) in revenue from stamp duty which accounts for 41.6% of total property tax revenue. The below chart highlights the value of revenue from stamp duty on conveyances and the proportion of total property tax revenue coming from stamp duty. As a proportion of total property tax revenue, stamp duty has previously been higher however, over the past few years there has been a substantial increase in the value of revenue collected from stamp duty.
Land taxes and municipal rates are much more guaranteed income streams than the more volatile stamp duty on conveyances. For this reason, it would make sense to move from stamp duty to a much more efficient, easier to collect and holistic land tax. The reality is that any such move is unlikely to be supported by the state governments currently given how much revenue these states continue to rake in due to the ongoing housing booms.
RP Data Core Logic