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Battle lines drawn on stamp duty rise

THE property industry has hit back at suggestions an increase in stamp duty is on the cards in the upcoming State Budget.

While an increase in interest rates in 2002 could attract investment in commercial property in the State, any rise in stamp duty is likely to counter that increase.

Property Council chief executive officer Joe Lenzo said the Government was hitting the property industry again to address a budget shortfall, despite the considerable revenue from the GST.

“Somewhere the Government has to bring equity back into the State taxes,” Mr Lenzo said.

“The Government can’t ignore this simply because it needs the revenue.

“We need to support the industry and the industry needs to understand it’s overtaxed.”

A spokesperson for the Government said it was reviewing various options ahead of the budget announcement.

‘We’re putting together a budget and the budget is put together in confidence. We’ve had pre-budget sub-missions from lots of groups and they have all been taken into account,” the spokesperson said.

Property Council policy manager Geoff Cooper said the commercial property sector would attract more attention as interest rates rise over the year.

“With leading economists and the Reserve Bank predicting an upwards cycle in interest rates we expect increased interest in commercial property as an investment option. Investors who may have been attracted to the residential market can obtain higher yields in commercial property, sometimes in excess of 10 per cent,” he said,

The uncertainty in the market, spark-ed by rumours of an increase in business taxes including stamp duty, could act as a deterrent for potential investors.

“There are lots of rumours about the Government, including increases in taxes and stamp duty,” Mr Lenzo said.

“We would find it rather nonsensical and I don’t expect them to do it.

“Out most recent submission included seven policy solutions to deal with the tax issue.”

The business activity figures released by the Department of Land Administration show that Perth has posted its highest level on record apart from the rush ahead of the introduction of the GST.

“Realistically this past month, and even the entire March quarter, can be considered the most active since DOLA began recording activity in 1995,” FPD Savills managing director Jeff Braddock said.

“While it is possible there was a slight rush by purchasers to beat a feared interest rate rise in early April, the fact the rate rise did not occur should bode well for figures over the next month or two.”

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