State and Local Governments Rake in Record Highs in Property Taxes
Buoyant housing market conditions over 2009 - 2010 saw property related taxes rise to the highest amount on record, bringing in $32 billion to state and local government coffers.
Property taxes are the largest source of tax revenue for state and local governments and last financial year's record high came off the back of residential property transactions that totalled more than $247 billion.
This includes taxes on immovable property such as rates and land tax, and taxes on financial and capital transactions including stamp duty.
This amounts to more than 48% of total tax revenue for local and state governments during 2009 - 2010, explaining the reluctance in removing taxes such as stamp duty.
However, predictions are for a drop in property related taxes in the 2010 - 2011 financial year, with RP Data reporting a 1.6% fall in capital city dwellings May to February 2011, and sales volumes at their lowest during an annual basis since 1996.
Indications point to the softening conditions leaving state and local governments with a budgetary hole.