New data showed that stamp duty has hit record high levels in some states, despite the fact property values are falling.
In light of data from the Australian Bureau of Statistics showing property taxes rose by 5.6 per cent over 2017-18 to $30.293 billion, CoreLogic research analyst Cameron Kusher has called for taxation policy to be reviewed.
Other property taxes also increased, which included land taxes (by 9 per cent to $9.153 billion), municipal rates (by 4.3 per cent to $18.451 billion) and other taxes (by 3.4 per cent to $2.689 billion).
Mr Kusher analysed the results and said that the revenues from property taxes are at their highest points in the most popular states, which includes NSW with $8.382 billion, Victoria with $8.778 billion, Queensland with $5.658 billion and Western Australia with $3.654 billion.
Revenues in South Australia were at $2.433 billion, $549 million in Tasmania, $133 million in the Northern Territory and $705 million in the ACT.
However, while stamp duty funnels the most amount of funds to the most popular states, according to CoreLogic, actual stamp duty revenue rose slightly in the last year of data, but declines in most states and territories, with declines seen in NSW, Queensland, South Australia, Western Australia, the Northern Territory and the ACT, while rising elsewhere.
Because of transaction values declining, stamp duty is expected to decline further in 2018-19.
“Taking a look at stamp duties, which although they are no longer defined as part of ‘taxes on property’, they are a tax paid when a property is transacted,” Mr Kusher said.
“When the housing market is seeing increased transactions and rises in values, stamp duty generally rises and vice versa. The national housing market started to see values fall late in 2017 and, as a result, stamp duty revenue is largely unchanged in 2017-18 from the previous year.”
Mr Kusher also predicted that the NSW and Victorian governments will see stamp duty revenue decline over the next few years, and as such they should pivot away from this particular duty.
“Although no one likes additional taxes, a tax on all residential properties is more equitable than a tax on the 4-6 per cent of properties that transact in any given year,” he said.
“Furthermore, it provides a more guaranteed revenue stream to state government so they can better plan their expenditure into the future.”