Stamp duty slug on the way

WA businesses still face the spectre of State Government-imposed stamp duty after the GST comes in.

When the GST was promoted, state charges such as stamp duty, financial institutions duty and bank account debits tax were to be abolished.

The FID may have gone but the stamp duty is here to stay.

In some cases, such as motor vehicle purchases, the abolition of wholesales sales tax will make the price – and the stamp duty payable – go down.

However, stamp duty on insurance premiums will be calculated on the new, GST-inflated rate.

Combined Small Business Associations of WA president Oliver Moon said workers’ compensation insurance premiums had already risen up to 500 per cent in some cases.

“The last thing small business needs now is the government getting into the act with the legal and insurance

industries by ripping off small business through it loading stamp duty after the GST has been applied to business and workers’ compensation insurance,” Mr Moon said.

Property Council of Australia WA Branch executive director Joe Lenzo said Perth homebuyers would pay an extra $518 in stamp duty on new home purchases as well as a 10 per cent GST.

He said the policy would also hurt thousands of small businesses that faced rate increases under plans to levy stamp duty on post-GST values.

“This policy is nothing more than a mechanism to line the government’s pockets at the expense of homebuyers and the thousands of small businesses that rent property,” Mr Lenzo said.

Real Estate Institute of WA president Neville Fox said the State Govern-ment’s move was ironic because the community was told the Federal Government would act to ensure there was no profiteering from the GST.

“However, here is a case of the State Government planning to receive indirect windfall tax gains out of another new tax,” Mr Fox said.

Premier Richard Court said stamp duty was going to be applied as it had always been applied.

“It was always applied after the Federal Government charges had been applied,” Mr Court said.

“It is a uniform principle we and other states have had.”

Mr Court said other countries that employed value added taxes such as the UK, Canada and New Zealand employed a similar stamp duty policy.

“Because of the Democrats changes to the GST we won’t be able to get rid of a lot of taxes,” he said.

“I anticipate in four to five years time there will be some growth in revenues flowing through.

“For the next three to four years it will be status quo,” he said.

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