Property taxes remain one of the biggest revenue earners for government, with the state and local governments in Western Australia raking in more than $4 billion from property taxes last financial year.
Property taxes remain one of the biggest revenue earners for government, with the state and local governments in Western Australia raking in more than $4 billion from property taxes last financial year.
Figures from the Australian Bureau of Statistics showed Western Australians paid $1.7 billion in property tax and $2.3 billion in stamp duties on property transactions in 2007-08.
That equates to almost double the mount of taxation revenue state and local governments collected from property owners five years ago, when their total tax take was $2.13 billion.
Collectively, taxes on property are the government's largest source of taxation revenue. Payroll tax, the next biggest tax revenue earner, now makes up almost a quarter of total taxes collected, with employers paying $1.9 billion in payroll tax in 2007-08.
Limnios Property Group chief executive James Limnios said the high rate of taxation meant that the 850,000 private property owners in WA were, on average, paying annually more than $4,000 in taxes including stamp duties, land taxes and local government rates.
"This high rate of government taxes on property is currently leading to distortions in the property market and making the current rental crisis even worse. For example, significant declines in stamp duties for properties priced below $500,000 has meant that there is now much greater activity at the bottom end of the real estate market compared to more expensive properties where high levels of stamp duties still apply.
Mr Limnios said many landlords now had to factor in at least $50.00 in weekly rents just to cover local government and state government charges.
"Rising land taxes and local government rates has also meant that private landlords have had to pass these costs onto tenants which has contributed in weekly rents rising significantly over recent years," he said.
"Property investors who have several investment properties in the inner city areas of Perth now have to deal with annual local government and land tax bills in excess of $20,000 each year.
RP Data's National Research Director Tim Lawless said collectively, state and local governments raked in just over $31 billion in property-related taxes in the last financial year.
He believes it's governments needed to look at a reprieve on stamp duty for other segments of the market, and not isolate incentives just to first home buyers.
Mr Lawless said that with a large fall in property transfers in the first half the current financial year, the impact on state budgets for 2008-09 was likely to be significant.
