07/08/2020 - 13:00

Stamp duty substitute: not now

07/08/2020 - 13:00

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Housing minister Peter Tinley shut down hopes of a potential stamp duty substitute in the near future at a property industry event earlier this week.

Stamp duty substitute: not now
Peter Tinley said now was not the time to address further stamp duty reform. Photo: Gabriel Oliveira

Housing minister Peter Tinley shut down hopes of a potential stamp duty substitute in the near future at a property industry event earlier this week.

Speaking at the Ready to Rebuild: Priorities For A Rapid Recovery breakfast hosted by the Urban Development Institute of Australia WA, Mr Tinley responded to queries over further stamp duty reform.

Under the state government’s introduction of a $444 million Building Bonus stimulus, the 75 per cent off-the-plan transfer duty rebate (capped at $25,00) was expanded to include purchases in multi-tiered developments under construction, in addition to pre-construction contracts.

But the property industry has been calling for further stamp duty reform in Western Australia, with the Real Estate Institute of WA president Damian Collins calling on the government to fast-track discussions over stamp duty removal.  

When asked whether the government had any appetite to substitute stamp duty with a broad based land lax, as seen in the ACT, Mr Tinley told UDIA WA event attendees: no.  

“As my daughter who keeps hounding me for a different decision I’d say; hang on let me have a think about that… no,” he said.

“This is the old chestnut and I’m (not) suggesting for a second that this space won’t move in the future but right now is definitely not the time.

“But for those who still want to pursue this agenda take heart from the GST debate - nobody ever thought we’d see GST move but it did.

“The issues are really important and they’re political and I won’t shy away from this point – the fiscal cliff you will go over when you have to wean yourself off this particular set of revenue is huge but then you have to contemplate the potential for a tax bill on every household in the order of $3,000 to $8,000 a year.

“That’s the challenge.”

The ACT government has been pushing to phase out stamp duty as part of its 20-year plan to reform its property tax system, offset by the introduction of higher land taxes and rates.

“It’s a different model – they have a long-term lease arrangements over the land … to achieve the outcomes they want,” Mr Tinley said.

“I’m not saying never - but not in this term and I’ll doubt you’ll see it in the next term.”

Victoria has also been pushing to scrap stamp duty as has New South Wales, which has recently abolished stamp duty for first home buyers purchasing new homes.

“Our focus is solely on our responses to the COVID crisis and making sure the economic circumstances of WA are focused on jobs,” Mr Tinley said.

“We believe that long term structural reform like that won’t contribute to the sort of objectives that we have for the economy right now.”

Mr Tinley pointed to infrastructure projects as a key government focus to stimulate the economy and jobs.

Population growth was also a hot topic at the UDIA WA event, with industry members raising concerns over the property market’s long-term survival, which would largely be dependent on population growth.

Mr Tinley said there was so single answer to how the state would drive population growth in a post COVID world.

“Simply opening the border of WA isn’t necessarily the only solution net migration,” he said.

Western Australian Planning Commission chair David Caddy, who also spoke at the UDIA WA event, pointed to retaining FIFO families as one immediate beacon of hope, amid border closures.

There was at least one silver lining to the pandemic so far, he said.

“There’s an upside to the pandemic,” he said.

“And that is the fact that the planning reform agenda was propelled by the government to the forefront of its legislative program.

“Through these changes to the act and the forthcoming regulations we’ve probably saved at this stage two to three years in the planning reform agenda, which from my point of view is a good outcome of a fairly drastic economic situation at the moment.”

Among key planning reform agenda so far included an amendment to the Planning and Development Act 2005 (Planning and Development Amendment Act 2020) that now grants the Western Australian Planning Commission temporary decision-making powers over particular proposals deemed as ‘significant developments’.

Under the new streamlined assessment process, these developments are defined as those projects with an estimated cost of $20 million or more in Perth’s metropolitan area and $5 million or more in the regions.

Those projects will now be assessed directly by the Western Australian Planning Commission, via the State Development Assessment Unit (SDAU).

Mr Caddy said the SDAU had received one lodged application, three pre-lodged applications, and eight intent-to- lodge applications.

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