19 Firth Ave, Strathfield Agent: Joseph Georges se

It’s time for change.

PROPERTY ownership is taxing. It emerged this week that singer Guy Sebastian has put at risk his Los Angeles investment apartment after overlooking his US land tax obligations.

He could be in danger of losing the two-bedroom 1960s condo after being delinquent in paying the taxes for the past seven years.

The US authorities are going to sell it on October 22 unless he pays up. Official records show he has been in default since 2011.

The former Australian Idol winner advised it had come about inadvertently after the bills had been redirected to Olympian Ian Thorpe’s US pad nearby, as he had briefly stayed at Thorpe’s place.

Supplied images for Guy Sebastian tour

Guy Sebastian.

But all these land tax notices went unnoticed, and then Thorpe sold the house, so the letters never got back to Sebastian.

He also was naively unaware he had to pay land tax on the US property which cost $268,500 in 2010.

“I didn’t know you had to pay land tax for an apartment,” he told Kyle and Jackie O’s radio show.

There is nothing set and forget about property investment, here in Sydney, elsewhere in Australia or overseas.

Indeed there are onerous administrative burdens that come with ownership, for own occupation and especially for investment. And property is increasingly becoming a revenue jackpot for governments.

19 Bruce St, Stanmore. Property for sale through B

$40 billion annually in taxes from property buyers and owners is collected in Australia.

The Australian Bureau of Statistics (ABS) recently released data revealing that 48.7 per cent of local and state government taxation revenue comes from property taxes.

The data showed these two levels of government collect a record $40 billion annually in taxes from property buyers and owners.

By comparison, they collected $21 billion in taxes from employers.

With home values beginning to rise in mid-2012, taxes such as land tax, municipal rates and stamp duty on conveyances have all been on the increase.

Of the $40 billion in national property related tax revenue, some 40 per cent came from municipal rates and 36 per cent came from stamp duties on conveyances. Land tax was the other sizeable contributor to taxing accounting for 17 per cent of revenue.

Property related tax revenue is only collected by these two levels of government on those who own properties.

While our family homes are generally exempt from federal tax, if you rent out part or all of it you must include the income in your tax return and you may have to pay capital gains tax when you sell it.

Replacing stamp duty with a blanket land tax would be unpopular but I see it as inevitable. Cameron Kusher, CoreLogic’s senior research analyst, has calculated a blanket land tax to cover just the $16 billion in stamp duty revenue would see every residential dwelling having to pay $1700 annually based on the ABS estimate of around 9.4 million residential dwellings.

The issue is that governments are always looking to grow their revenues. And property is seemingly the easiest of pickings given the perceived wealth benefits enjoyed through the decades of ownership.

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