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Ralph review problems are laid bare

John Ralph has handed the Federal Government an 800-page blueprint for business tax reform, while the Property Council has intensified its lobbying effort.

The appointment of National President Carol Schwartz on the Federal Treasurer’s tax review group gives the Property Council a significant advantage over other interest groups.

The following is a quick rundown on the property specific issues:

Property Trusts – Income: The Property Council has already persuaded the Government to keep tax collectors away from listed property trust income.

Property Trusts – Tax Free and Deferred: Most people think this issue is lost. But, the winds are shifting in the industry’s direction – little doubt that this issue will be fought in the senate.

Wholesale Funds and Sub Trusts: The Government is considering the Property Council’s arguments for treating wholesale unlisted trusts like publicly listed trusts.

Accelerated Depreciation: Quick write offs are gone. The Property Council will negotiate new economic life rates with the Australian Tax Office.

Building Allowance: Ralph’s original plan to scrap 2.5 per cent and 4 per cent building allowances is now off the agenda. However, the fight for realistic write off rates continues. The Property Council is proposing a totally new depreciation and amortisation system.

Capital Gains Tax: The current proposal is not as good as it looks. Firstly, the new tapering system doesn’t decrease CGT liabilities fast enough or low enough. Secondly, indexation is sacrificed. Nevertheless, the recommendations are a starting point for more lobbying.

Trading Trusts: Treasury’s plan to tax property trusts as companies by arguing they are not active traders (and not passive investment vehicles) remains on the boil, as does lobbying against the move.

Property is Unproductive: Some Ministers argue that property is not an industry and will push for tax concessions for the latest fad industries – everyone loves biotechnology at the moment. The Property Council is launching a PR campaign on this issue.

Note: Register for the Property Council’s 4:00 O’clock Forum – The Impact of the Ralph Committee Report on the Property Industry – presented by KPMG on 14 September 1999. Contact Tanya or Jean at the Property Council on 9321 1156.

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