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Property tax intake hits record despite housing slump

Government revenue from property-related taxes rose 4.6 per cent last financial year to a whopping $33 billion, despite a slump in the residential housing market.

Property taxes reached record levels last financial year but the increase in the amount taken slowed markedly, dampened by falling house prices and stamp duty revenues.

In 2010-11, governments made $12.3 billion in stamp duty charges. That was up slightly from the previous year but well down from $14.2 billion peak in 2007-08 before the global financial crisis.

The biggest addition to government’s coffers came from municipal rate revenues which grew nearly 7 per cent in 2010-11, providing $12.4 billion or about 40 per cent of the property tax pie, according to a report from property analysts RP Data.

The rate revenue boost was coupled with rising land taxes, RP Data researcher Cameron Kusher said.

Victoria and NSW were the only states where stamp duty revenue rose, in all others it slumped following a 17 per cent fall in property transactions from the previous year.


“Considering ... 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,” Mr Kusher said.

Property taxes accounted for nearly half of all state and local government revenue, the report said.

The ability of governments to increase revenue may be further hampered this year.

In a separate report today, the Housing Industry Association said land sales have hit a fresh low and median land values have risen further in the December 2011 quarter.

The volume of residential land sales fell by 27 per cent over the year to December last year, the HIA said.

At the same time the medium price of land rose to just below $195,000, it said.

“The volume of residential land sales has been below the previous trough set during the GFC for five consecutive quarters now,” said HIA chief economist, Harley Dale.

“This situation points to there being no discernable recovery on the horizon for new home building,’’ he said.