Land tax comments step in the right direction
The Property Council welcomes the comments made by WA Treasurer Ben Wyatt in Parliament yesterday acknowledging the impact of land tax on the property industry.
These comments build on remarks made to a Property Council breakfast in the past fortnight where the Treasurer indicated the McGowan Government was open to considering measures that would ease the burden of state taxes on a recovering property market in Western Australia.
Property Council WA Executive Director Sandra Brewer said a renewed focus on land tax and other property-based taxes would deliver significant benefits to Western Australian homeowners, as well as stimulating economic activity.
“The Treasurer has rightly acknowledged that increased land taxes hurt homeowners and investors,” Ms Brewer said.
“It’s encouraging to see the McGowan Government not only understands the adverse impact of land and other property taxes on the sector, but that they are also committed to making decisions that help grow the industry in WA.
The Treasurer’s comments come at a time when Property Council members are reporting a substantial drop off in apartment sales to foreign buyers. This is a result of the McGowan Government’s Foreign Buyers Surcharge, implemented on 1 January 2019, which adds a further $47,740 to the cost of the average apartment in Western Australia.
The impact of the surcharge has been to reduce pre-sales which are critical for construction companies to get projects up and running. The Treasurer is aware of this impact and industry concerns about the long-term consequences of this measure for jobs and economic activity.
In light of Housing Minister Peter Tinley’s comments this morning that WA’s economic future is “deeply connected” to Asia, the Property Council calls on the State government to reconsider the Foreign Buyer Surcharge.
Ms Brewer said, “It is inconsistent for the State government to talk up the prospects of a deep connection with Asia, yet at the same time charge prospective homeowners an additional $47,000 on the average apartment value.”
‘By looking at the impact property taxes have on the wider economy and using the available levers to address this problem, the State Government will be in a better position to deliver on its commitments to boost jobs and support a strong economy,’ Ms Brewer added.
‘We look forward to seeing what the Treasurer has planned to support homeowners and construction jobs in the lead up to the Mid-Year Budget Review,’ Ms Brewer concluded.
Land Tax Facts:
- Land tax is estimated to collect $790m in revenue in 2019-20
- This compares to only $373m in Vehicle Licence Duty – less than half the land tax collected over the same period
- The property industry is taxed at all stages of the product lifecycle (from development, usage and disposal) and by all tiers of government
Sandra Brewer | 0418 501 030 | email@example.com