Major Reform Of The Property Tax System
  • 11 January 2017

Major Reform Of The Property Tax System

Major Reform Of Property Taxation System Urged During 2017 With Property Tax Collections Surging By Over 40% Since 2010

With all levels of Government throughout Australia now collecting more than $45 billion annually in property taxes each year, Property Club has called for major reform of property taxes during 2017.

Since 2010, annual property tax collections by Government have surged by 42% throughout Australia compared with an overall increase in Government taxation collections of 33% during this period.

In comparison to the 42% surge in property taxes, total GST collections have increased by just 17% since 2010.

The accelerated growth in property taxes compared to total taxation revenue means that Governments throughout Australia are now collecting more than $11 billion in property taxes now compared to 2010.

As a result of this surge in property taxes, property buyers in most capital cities of Australia are now paying the equivalent cost of buying a new car in stamp duty costs according to Property Club spokesperson Troy Gunasekera.

Mr Gunasekera said that in Sydney and Melbourne Property buyers were paying on average between $31,763 and $32,680 in stamp duty charges when buying a property while in other capital cites average stamp duty charges for buying an average home can ranged from $17,000 in Perth to $20,000 in Adelaide.

“This amount of money which is going to the State Government in stamp duty charges for an average home sale is equivalent to the price of a brand new car.

“It is outrageous that property buyers should have to pay the equivalent price of a new car just to have the right to purchase a property due to the surging levels of stamp duty that should have been abolished years ago.

“The reality is that these stamp duty costs should not exist as all levels of Government agreed to phase them out after the introduction of the GST.

“Stamp duty was subsequently removed from transactions on shares but remained on property and the cost to property owners has blown out over recent years as property values have exploded in areas such as Sydney and Melbourne.

“Property Club believes that there needs to be urgent financial reforms that ensure that the undertaking made by Governments to remove Stamp duty is honoured.

“These reforms should also include making the RBA and APRA more accountable for their actions which will also bring financial relief to property buyers.

“The RBA has overseen the distortion of banking system since 2008 which has allowed the big four banks to control 80% of the market resulting in exorbitant interest rates for property owners compared to the USA, Canada or the UK.

“At the same time, the credit squeeze imposed by APRA is reducing the supply of new homes which in turn has put an upward pressure on property prices in Melbourne and Sydney during 2017 – the very opposite to what APRA had predicted would happen.

“These soaring property prices has meant even higher levels of stamp duty payments for property owners with them now handing over the equivalent of a new car in stamp duty costs to the Government every time they buy a property,” he said.

ENDS

MEDIA CONTACT IS TROY GUNASEKERA 0417-132-732

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