Australian home buyers face some of the highest tax rates in the world, paying an average of almost $45,000 in taxes and fees for a million-dollar house, accountancy UHY Haines Norton has found.
The accountancy calculated fees on property purchases of $US75,000, $US150,000, $US350,000, $US500,000, $US1 million and $US3.5 million in 25 developed countries.
Luxury Australian homes attracted an average stamp duty of around 5.3% – the 3rd highest property tax rate worldwide, after India (8.02%), Spain and the UK (the latter two were tied second with a 7% tax rate).
UHY noted that Australian property tax rates were determined by the various state governements and thus varied widely across Australia.
Queensland home buyers paid the lowest property tax by far, paying only $US8,792 on a $US500,000 home, compared to $US24,018 in the Northern Territory.
UHY partner Dario Nazzari said high property tax rates could hamper overseas investment and discourage people from moving interstate for a new job.
“This effects the mobility of the labour market in Australia as it is not simply a case of selling in one market and buying in another,” he said. “Even if employers agree to foot the bill, it adds a further overhead and cost to Australia’s already high labour costs as highlighted in a recent UHY study on labour costs.
“In North America, which is renowned for its flexible and mobile labour market, property taxes are below 1% in the USA and no higher than 1.23% for median priced homes in Canada.
“Compare this to a rate around 4.8% in the Northern Territory and you can see one labour mobility impediment our labour market faces.”
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