17/04/2001 - 22:00

Land tax hits profits

17/04/2001 - 22:00


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RISING land taxes are hurting small businesses and retailers which are already struggling to remain competitive.

Land tax hits profits
RISING land taxes are hurting small businesses and retailers which are already struggling to remain competitive.

In the lead-up to the State Budget, both the property and retail sectors are calling for a reduction in land taxes which have increased by 44.2 per cent since 1994.

The WA Property Council yesterday released its annual pre-budget submission and called for an urgent business tax review to address what it labelled a “discriminatory” tax system.

“The present land tax system discriminates against owners and tenants of large properties, forcing a premium on to the goods and services of some businesses while subsidising others,” the submission stated.

Burgess Rawson retail asset manager Cameron Hopkins said it was tenants who were bearing the brunt of rising land taxes as any increases were passed from landlords on to them.

“Under most commercial leases the tenants are required to reimburse their landlords for any land taxes,” Mr Hopkins said.

“With other taxes they can see what it goes towards but most see land tax as just a penalty … they get nothing for it.

“Some of the small businesses really struggle to pay it … they have to sell more to cover it.”

Capital Retrovision owner Mario Nobre said his land tax jumped by 95 per cent last year and stopped him employing two more staff at his Perth store.

“I do not mind paying tax when I get something for it but I cannot see what the govern-ment does with it,” Mr Nobre said.

Independent Retailers Organ-isation chairman Bob Stanton agreed, saying it put enormous pressure on businesses and in some cases reduced their viability.

“It is just another impost that small retailers just have to bear and it can be very expensive,” Mr Stanton said.

“With all the other outgoings we have to pay, land taxes are making small businesses non-viable.

“And they have absolutely no benefit whatsoever.”

Mr Stanton’s claims were supported by the property council’s submission, however it took the impact of the tax a step further, saying it also impacted on everyday con-sumers.

“Land tax adds to the cost of doing business for retailers and small businesses that lease space in shopping centres and other large properties,” the submiss-ion stated.

“They pay the impost through outgoings and pass the cost on to consumers of goods and services.”


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