The 2008-09 State Budget includes welcome tax reforms in the property sector and the provision for much needed infrastructure in Western Australia. However the Budget forecast for land tax revenue is excessive.
The Budget includes tax relief measures for the property sector in WA amounting to a saving of $224 million in 2008-09.
“The tax savings announced in the Budget will improve housing affordability and extra incentives for investment in rental properties over the short-term,” said Joe Lenzo, Executive Director of the Property Council of Australia (WA).
“The 15% stamp duty savings for owner occupiers will help households that are struggling to buy a home. Property investors will also recognize the reduction in stamp duty and land tax concessions in the Budget.
“The significant boost to the State’s infrastructure program in the Budget is timely and we look forward to the release of the State infrastructure strategy later in the year.
“However the Budget papers forecast a worrying blow-out in expected land tax revenues. Over the next four years the total revenue from land tax in WA will grow from $426 million to $744 million, which is an increase of 74%. In comparison the revenue from stamp duty is expected to remain flat.
“While the Government is applying welcome restraint on stamp duty revenue, the Budget shows that the Government has removed the shackles on land tax.
“This signals a change from earlier Government policies, which constrained total land tax revenues. This requires an explanation from the Government, particularly as high land taxes will counter attempts to encourage long term private investment in social housing.
“On balance the Budget is a sound outcome for the property sector. The stamp duty reductions and infrastructure investments are significant.
“But the land tax revenue blow-out is a major concern”, said Mr Lenzo.
Joe Lenzo, Executive Director, (08) 9426 1200 or 0419 044 768
Lino Iacomella, Manager Policy & Communications, (08) 9426 1204 or 0417 501 974