New research from HomeLoanRates.com.au, conducted by Primara Research, reveals the true annual property tax bill facing the average Australian property owner - and the surprising leader is the ACT at $5,837 per dwelling per year, 36% above the national average of $4,284 and ahead of Victoria at $5,108.
Despite Sydney's status as Australia's most expensive property market, NSW sits at $4,189 per year - $1,648 below the ACT and 28% behind the national leader.
Most states collect through a similar structure: municipal rates carrying 65-70% of the annual bill, land tax around 20-25%, and other levies the remainder. NSW, Victoria and the Northern Territory are the exceptions.
NSW concentrates 56% of its burden in land tax, ranking second per dwelling at $2,357 despite a high apartment concentration suppressing the average, while its municipal rates ($1,771) are the lowest of any state, 20% below the national average of $2,213.
Victoria runs closest to an even split. The NT collects no land tax at all.
The ACT shares the majority composition but at a significantly higher base, the result of a 2012 reform program originally designed to phase out stamp duty, leaving it with below-average stamp duty and the highest ongoing rates in the country.
In NSW, a full year of property taxes amounts to just 6% of the average stamp duty bill.
In the ACT that figure is 15%, more than double, with a national average of 7%. For owners who stay rather than move, the ongoing bill eventually becomes the larger cost: in the ACT within seven years, nationally around 14, in NSW around 18.
"NSW extracts its tax revenue at the point of sale," said Peter Drennan, head of research and data at Primara Research.
The ACT does the opposite, lower entry cost, higher annual holding cost.
"Both are substantial.
"They just land at different points in ownership."
NSW annual property taxes are growing faster than any other state, up 43% over five years and 11% last year, almost double the national average.
The average Australian pays $1,075 more per year than five years ago, $1,254 in NSW and $1,435 in Victoria.
Cumulatively, ACT property owners have paid an estimated $47,700 over a decade, ahead of Victoria at $39,000, the national average at $33,500, and NSW at $30,800.
"Rising land values feed directly into land tax in states where it dominates the bill," Drennan said.
"In NSW, where land tax accounts for 56% of the annual burden, growing property values mean growing tax obligations, compounding ownership costs in ways that rarely feature in affordability discussions.
"Stamp duty gets the attention.
"The annual bill is the one that keeps climbing."
