New research reveals a sharply uneven picture of Australia’s annual property tax burden, with the Australian Capital Territory emerging as the highest-cost jurisdiction for homeowners.
The ACT records an average annual property tax bill of $5,837 per dwelling, which is 36% above the national average of $4,284 and ahead of Victoria at $5,108. NSW, despite Sydney’s position as the country’s most expensive property market, sits lower at $4,189, which is $1,648 below the ACT and 28% behind the national leader.
Research from HomeLoanRates.com.au, conducted by Primara Research, shows most states follow a broadly similar structure in how property taxes are collected, with municipal rates making up around 65–70% of the annual bill, land tax accounting for about 20–25%, and other levies covering the remainder.
However, NSW, Victoria and the Northern Territory diverge from this model. NSW places a heavier emphasis on land tax, which makes up 56% of its annual burden, while it ranks second per dwelling at $2,357, despite a high concentration of apartments reducing the average.
Its municipal rates are $1,771, the lowest of any state and 20% below the national average of $2,213. Victoria sits closest to an even split between categories, while the Northern Territory collects no land tax at all.
The ACT follows the same general composition but from a significantly higher base, reflecting a 2012 reform program originally intended to phase out stamp duty, leaving it with below-average stamp duty and the highest ongoing rates in the country.
The difference between upfront and ongoing costs is also pronounced. In NSW, a full year of property taxes equates to just 6% of the average stamp duty bill, while in the ACT the figure is 15%, more than double, with a national average of 7%.
Over time, the annual burden becomes the dominant cost of ownership, reaching that crossover point within about seven years in the ACT, around 14 years nationally, and approximately 18 years in NSW.
“NSW extracts its tax revenue at the point of sale. The ACT does the opposite, lower entry cost, higher annual holding cost. Both are substantial. They just land at different points in ownership,” said Peter Drennan, Head of Research and Data at Primara Research.
NSW is also experiencing the fastest growth in annual property taxes, up 43% over five years and 11% in the past year, nearly double the national average. Across Australia, the average homeowner is now paying $1,075 more per year than five years ago, including increases of $1,254 in NSW and $1,435 in Victoria. Over a longer horizon, ACT property owners have paid an estimated $47,700 over the past 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. 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,” said Drennan.