THERE is growing anger and frustration in the WA property sector as higher land tax assessments hit investors without any offsetting reforms like stamp duty reductions, according to the Property Council of Australia WA.
WA executive director Joe Lenzo said successive land tax increases had the potential to scare off much needed investment, which would affect not just the property sector but the state economy as a whole.
“For the third year running we are being whacked by higher land tax increases with no plan to help the property sector grow through WA’s changing economic situation,’’ he said.
Mr Lenzo said the increase in this year’s land tax assessments followed a sharp increase in land tax rates in the State Budget earlier this year.
He said the property sector understood WA’s difficult budget situation but without a reform plan the continual land tax increases are just a tax grab.
“Since 2013 WA’s land tax rates have risen by over 50 per cent and for many individuals and businesses the actual land tax assessments have more than doubled because of the practice of aggregating properties into higher tax thresholds for assessment purposes.
“It’s just not good enough to slug the property sector to fix the state’s budget problems without giving the sector any hope that there is an economic reform plan to guide the sector’s and the state’s growth. “The WA property sector is calling on the Barnett Government to immediately rule out any more land tax increases and engage with the industry on effective tax reform, including a plan to phase out stamp duty, strategic stamp duty reforms to support WA’s urban growth plans like removing the stamp duty impost for off the plan purchases and helping seniors with their housing moves and moving to a single flat rate of land tax which removed the scourge of land tax aggregation.
“The property sector is ideally positioned to keep WA growing and tax reform is essential to maintain and attract new investment in the state.
“The State Government needs to come to the table and address the industry’s concerns or we risk losing out on lucrative investment opportunities.”
Acting Treasurer John Day said the government was aware of the Property Council’s views on land tax and had an ongoing dialogue with them on a range of tax issues relating to WA’s property industry.
Mr Day said the new land tax scale was part of a package of revenue and savings measures to help ensure the state’s finances remain sustainable in what was a challenging economic and fiscal environment.
“These challenges include substantial weakening of the iron ore price, a significant decline in the oil price, a further decline in WA’s GST revenue and generally weaker growth in the state’s major tax bases as population growth and business investment continue to moderate,’’ he said.
“Despite the increase in land tax rates, WA’s land tax rates will remain below that of most other jurisdictions at lower land values and remains more than competitive at other values.’’
“For example, land tax on land with an unimproved value of $1 million in WA is now $1750, compared with $2975 in Victoria, $4500 in Queensland, $11,293 in the Australian Capital Territory, $9188 in New South Wales, $11,588 in Tasmania, and $9101 in South Australia.
“For a landholding with an unimproved value of $2 million, land tax payable in WA will be $12,550.
“This is slightly higher than the $11,975 payable in Victoria, but compares very favourably with $21,000 in Queensland, $23,592 in the Australian Capital Territory, $25,188 in New South Wales, $26,587 in Tasmania, and $45,087 in South Australia.
“These land tax increases reflect the fact that WA is now more reliant than ever on the revenue it raises from its state taxes.
“Unfortunately, states have limited options for raising revenue to help fund essential community services such as education, health and law and order.
“Potential reforms to state taxes, such as stamp duty and land tax, will be considered in the context of the Commonwealth’s Tax Reform White Paper process, with input from key stakeholders such as the Property Council.
“It would be premature to speculate on particular reform options until potential reform options have been fully considered through this process.
“Western Australia has consistently stated its position that reform of the GST distribution, which would substantially increase the capacity of the state to undertake future tax reforms, is a prerequisite for its support for reforms that may be proposed through the White Paper.’’
Original article here
How to calculate Land Tax in WA here
The solution is to buy shares!!!