There has been a mixed reaction from industry to the State Government’s $518 million property relief package announced last week.
There has been a mixed reaction from industry to the State Government’s $518 million property relief package announced last week.
Among the changes are a 10 per cent cut to stamp duty on all property conveyances, the abolition of stamp duty for first-home buyers on homes valued up to $250,000, and the reduction of land tax scales.
Stamp duty on financial and capital transactions represented 33 per cent of government revenue in 2003-04, an increase of 91 per cent since the Gallop Government came to power.
Real Estate Institute of Western Australia President Greg Rossen said the reduction in rates wound back a significant portion of the stamp duty increases introduced by the Gallop Government.
“This is a very welcome initiative but it falls short of totally reversing the massive increase in stamp duty rates by the government since 2001,” Mr Rossen told WA Business News.
He said the real problem – tax assessments accelerating faster than property values was not dealt with – and indicated REIWA would be lobbying for further tax reform.
Property Council executive director Joe Lenzo said the tax announcement was the second step in the right direction by the WA Government in the past six months and would help attract investment to the State.
“The benefits will flow, not only to big business but all Western Australians with an interest in property, from first-home buyers, and mum and dad investors, through to retirees with superannuation and property trust investments,” he said.
Mr Lenzo said the cuts were a step towards the phased abolition of commercial stamp duty as proposed in the Intergovernmental Agreement, introduced to address State taxes following the introduction of the GST.
When the GST was introduced, stamp duty on commercial property was identified by State and Territory leaders as a tax that would be abolished once revenue from the new tax system increased.
In February 2005, State and Territory leaders will be meeting to review revenue and taxation issues.
Mr Lenzo urged the WA Government to commit to the abolition of stamp duty for commercial property at that meeting.
“The current Government surplus, combined with the continued growth of GST revenue to WA, gives the treasurer the ability to abolish commercial stamp duty within the next term of government and the Property Council expects the Government to honour the GST agreement,” he said.
Roy Weston Group CEO Geoff Baldwin was more critical, calling the stamp duty cuts a vote grab and an insult to Western Australian homebuyers.
“Dr Gallop made a clear pre-election promise not to increase stamp duty only to then hike it by more than 24 per cent over two budgets,” Mr Baldwin said.
“To give a fraction back in an attempt to placate industry and the voting public simply won’t wash with Western Australians.”
