Submissions to push for property tax relief

PROPERTY organisations will lobby for the scrapping of stamp duty and other property taxes as part of the State Government’s business tax review.

The State Government has called for submissions as a follow up to its pre-election commitment to review business taxes. Both the Real Estate Institute of WA and the Property Council of WA claim reducing, or phasing out, the taxes would boost the local economy.

REIWA public affairs director Lino Iacomella said an independent report commissioned by REIA and carried out by Access Economics indicated that the removal of property taxes, such as stamp duty and land tax, would have more benefits than the removal of any other tax.

“We found that removing property taxes, like stamp duty, would create more follow-up investment in the State than the reduction or removal of any other tax,” Mr Iacomella said.

“The analysis also shows that,

by the middle of this decade, the

WA Government will be receiving GST revenue that is exceeding the revenue that would have been received before the GST.

“We believe that point will be the first real opportunity for the removal of State taxes, and the first ones that should go should be stamp duty and land taxes.”

He said REIWA would be looking for a commitment from the State Government to move toward reducing, or even eliminating, these taxes after 2004.

He also stressed REIWA would be looking for a commitment that the Government would not introduce any other property-based taxes.

REIA president Michael Davoran suggested this proposal had the support of the Federal Government and said the national body was eager to work in partnership with the Government to have the taxes removed, as was promised with the introduction of the GST.

“I really think (the Howard Government) did have the intention of getting those (taxes) reduced or eradicated when they were talking their pure form of GST, but of course the pure form wasn’t the end form and something had to suffer,” Mr Davoran said.

“Prior to the election, we wrote to all major parties to get their opinion on what they thought of it and whether they would encourage States to reduce these forms of taxes.

“And certainly (the Howard Government) is very keen, once the GST revenue gets to reasonable standards, to put pressure on the States to look at these other taxes.”

Property Council of WA policy and communications officer Geoff Cooper said if property-based taxes were reduced or removed, the State would become more attractive to foreign and interstate investors.

“Increased investment in the State leads to more jobs, which in turn leads to more tax revenue and the government is then able to fund its social agenda,” he said.

Mr Cooper said the PCWA would focus on having the three major property-based taxes – stamp duty, land tax and the Metropolitan Region Improvement Fund tax – removed from commercial property transactions as a priority.

Chesterton International managing director Graham Iddles said the scrapping of the taxes would put property investment on a par with other investment categories, such as share and equities.

“At present the on costs of doing a property deal over $5 million, or any large deal, are enormous,” Mr Iddles said

“These taxes are an impost on investing in the property sector and should absolutely be scrapped.”

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