THE WA Government is charging stamp duty on GST even where GST is not payable rubbing salt in the wounds of the WA property industry already hurting from the double tax on property transactions.
Phillips Fox partner Geoff Stevens described the situation as ludicrous and reinforced the absurdity of the new tax system which allowed governments to get away with double taxing.
“Even though stamp duty was meant to disappear with the introduction of the new tax system, the tax remains,” he said.
“But now the State Revenue Department (SRD) has decided to assess stamp duty on 110 per cent of the purchase price – even where there is no GST actually payable on the deal.”
Mr Stevens said it was bad enough for investors to have to pay stamp duty on a tax, but now they were being hit with stamp duty on purchase amounts that do not exist.
“I believe the Treasurer should move swiftly to rectify the situation and issue an instruction to the over-zealous SRD to exercise common sense,” Mr Stevens said.
He said the situation had arisen because of a strange interpretation of sale contracts.
This had seen stamp duty payable on a contract assessed on the basis of the total potential payment under the legal contract – most of which now include GST clauses as standard – rather than the amount actually paid.
“The SRD takes the view that the stamp duty should be payable on the total purchase price under a contract, including GST,” he said.
“But the SRD is adopting this practice even where there is clear evidence that no GST is actually payable.”
