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Call to scrap Stamp Duty Act

STRICT State stamp duty laws are in the sights of the WA property industry.

The industry says he complex and costly tax is deterring wholesale property trusts from investing in local properties and pushing them toward east coast investments.

Wholesale property trusts are unlisted and open only to industry investors, such as superannuation funds. Revised State legislation, introduced last year, tightened stamp duty laws so that every transaction relating to a wholesale property trust with any WA property investments incurs a stamp duty at a rate of 4.85 per cent.

The stamp duty also extends to ordinary WA investors whose superannuation funds have holdings in such a trust.

Labelled as discriminatory by the property industry, calls have now been made to the new State Government to scrap the stamp duty, or at least lower the rate to 0.3 per cent, the same rate enjoyed by securities and shares investments.

According to WA Property Council policy and communications officer Geoff Cooper, the disprop-ortionate tax was a disadvantage to the State.

“The benefits of wholesale property trusts investing in WA are outweighed by the complexities and costs,” Mr Cooper said.

In the property council’s draft pre-budget submission, it is stated the impact of the stamp duty legislation will threaten the attractiveness of national and international invest-ment in WA.

The tax has already caused the Industry and Superannuation Prop-erty Trust to re-evaluate the amount of money they sink into local property.

In the ISPT 2000 report, managing director Arthur Apted signalled a decrease in the trusts’ investment in WA.

“It is likely we will revisit our objective to invest15 per cent of our assets in WA in the absence of relief from paying stamp duty at the conveyance rate on new or transferred units in respect of their WA exposure,” Mr Apted said.

“This is an unfair impost on ISPT, given our widespread investor base of over 40 per cent of the Australian workforce.”

Burgess Rawson managing director Geoff Potter said while he did not believe stamp duty laws could be held solely responsible for deterring investment, they could have an impact on the number of deals made.

“I don’t think WA’s stamp duty laws would make or break a deal,” Mr Potter said.

“But there would probably be more deals, more turnovers if the stamp duty tax was less.”

The property council is calling for an immediate review of business tax to address what it sees as a discriminatory tax, which generates over 30 per cent of State taxation revenue. In their draft submission a number of strategies have been proposed that would see the removal of stamp duty from commercial conveyances over the next five years.

It is suggested a stamp duty cut could be partially funded by GST revenues that are exceeding budget.

“These excess returns should be applied to cut inefficient and inappropriate stamp duties on com-mercial conveyances to generate economic benefits for WA, which will result in investment in the community and jobs,” the sub-mission stated.

Another suggestion included broadening land tax to include all land above a minimum value.

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