Tax levers could stimulate property growth
It’s been encouraging to hear Treasurer Ben Wyatt being upfront about how land and other taxes he previously described as “ugly” may be contributing to weaker conditions for West Australian homeowners and investors.
In recent weeks Mr Wyatt has acknowledged some State taxes are hurting ordinary West Australians. He told a Property Council WA August 14 breakfast the McGowan Government will consider all options as it approaches its mid-year budget review.
“We have proven as a government we are happy to pull the levers that need to be pulled, bearing in mind we probably don’t have them all,” Mr Wyatt said, adding he wasn’t defending State taxes but had a responsibility to balance the books.
However, land taxes, stamp duty and the Foreign Buyers’ Surcharge are being charged at levels that hurt homeowners and investors. That works against the government’s goal of stimulating activity to create work to meet its 150,000 new-job target.
For example, the McGowan Government on January 1 introduced a Foreign Buyers Surcharge, which adds $47,740 to the cost of buying an average WA apartment.
It has dramatically reduced off-the-plan sales. Foreign buyers are a small proportion of WA apartment buyers but make a hefty contribution to ensuring enough apartments are pre-sold for developers to get finance to build. Just to be clear: No pre-sales equals no project funding equals no construction jobs.
The Treasurer is aware of the impacts of the Foreign Buyers Surcharge and of our concern about long-term consequences for construction jobs, a pipeline of projects and economic activity.
Housing Minister Peter Tinley, who unveiled WA’s first Asian Engagement Strategy last week, said our economic future is deeply connected to Asia.
From our perspective, it is inconsistent to talk up deep connections with Asia and charge prospective foreign homeowners an extra $47,000.
Lower foreign sales translate to delays to projects and construction work.
The Foreign Buyer Surcharge is a tax on WA’s economy, costing us foreign house and apartment buyers, delaying construction and costing jobs.
Treasurer Ben Wyatt is right. The McGowan Government has its hands on the levers it needs to pull to fix this problem. The question is, will it lower the levers?
We are hoping that Premier Mark McGowan will tell us more when he speaks at Property Council WA’s September 18 breakfast at The Westin.
To register, visit here:
- Sandra Brewer, Property Council WA Executive Director