Property tax is matter for the states: PM

Prime Minister Tony Abbott says a proposal by a prominent think tank urging state governments to introduce a property tax is up to the states.

The Grattan Institute says the introduction of a modest property tax would provide the states with much-needed annual revenue of $7 billion and could even replace less efficient stamp duties if it was made larger.

"What the states do is a matter for the states. We are in the business of cutting tax, not in the business of rising tax or shifting tax," Mr Abbott told reporters in Canberra.