📈It's eyewatering to see the growth across so many State taxes – both old and newly introduced – on top of the increases in Federal income tax burden (due to no indexation) & GST (due to cost of living/inflation).
The continued ratcheting of the main property-related taxes – Stamp Duty & Land Taxes – is extraordinary. Since 2014: • Land Tax $1.9B (FY14) to $6.5B (FY24) – ⬆️342% • Stamp Duty $4.19B (FY14) to $9.2B (FY24) – ⬆️220%
For context, the Median Victorian House price was $465k (2014) compared to $755k (2023, last full year reported) – so 62% growth. (Source: Victorian Government property sales data: https://lnkd.in/gSpcjQdv). This median includes the regions, not just Melbourne; the Melbourne median grew 55%.
Meanwhile, Stamp Duty thresholds were last reviewed in May 2008 (other than the addition of increased duty above $2m). What was the median house price back then? $335k.
I wonder how long we can continue with these whacky beliefs about the impact of taxes on the economy which assume no unintended consequences? Such as:
⛔High payroll and land taxes won't reduce business formation ⛔High red tape and poor administration won't mute business investment ⛔High land taxes won't push out property investors ⛔Foreign investor surcharges won't reduce apartment and housing supply ⛔High development taxes/levies/charges won't kill feasibilities and housing supply ⛔High state debt won't raise concerns about sovereign risk ⛔Windfall Gains Taxes won't reduce new development activity ⛔Huge infrastructure program won't crowd out the private sector
♻️It's a vicious cycle – tax more, reduce investment activity, so tax more to make up for said lost investment activity.