WA should get the tax settings right when implementing foreign owner duty surcharge

Property Council is urging the State Government to work with industry in the implementation of the foreign investor tax.

The State Government revealed in this month’s State Budget announcement the Government’s plans to introduce a four per cent foreign-owner duty surcharge from 1 January 2019.

It is crucial that WA learns from our eastern counterparts to ensure previous mistakes are not repeated when implementing the policy.

“The surcharge is expected to raise $49 million by 2020-21 however, it has been warned that despite the state government expecting to raise revenue through this measure, transfer duty revenue may actually decline if foreign buyers are discouraged from buying residential property in WA,” WA Property Council Executive Director, Lino Iacomella said.

“Stamp duty is generally considered by industry to be one of the state’s most inefficient taxes, with industry input we must ensure any foreign owner surcharge is applied effectively for the betterment of the property industry and the wider economy,” Lino Iacomella said.

“It is encouraging to see that the state government has included in the budget papers that the surcharge won’t apply to residential developments of ten or more properties, commercial residential property such as student accommodation and retirement villages and mixed-use properties that are used primarily for commercial purposes,” Mr Iacomella said.

“We need to ensure that clear exemptions are applied that will drive the economic growth of the state through the delivery of job-creating developments.” Mr Iacomella said.

“It is more critical than ever before to encourage investment in WA rather than deter, this is why it is so important to get the tax right to ensure that we keep WA growing.” Mr Iacomella said.