Western Australia’s 2014 budget: 10% land tax hike

The Barnett government has increased land tax by 10% across the board amidst slowing revenue growth.

As the state’s property market softens along with its labour market, the government has turned to land tax to offset the state’s declining revenues. The increase in land taxes is forecast to raise an additional $72 million in 2014-15 and $334 million over the four years to 2017-18. Land tax is expected to bring in a total of $752 million for the state this year, and is estimated to bring $1.01 billion in revenue in 2017-18.

In West Australia, land tax is payable on properties with unimproved land values over $300,000. According to the government, the majority of West Australian property owners will be unaffected by the land tax changes due to a range of exemptions. Approximately 80% of those affected, who hold land with an unimproved value of up to $1 million, will experience a tax increase of up to $70 per year.

After the tax increase, West Australian property owners who are ineligible for exemptions will pay annual land tax ranging from $110 for properties with an unimproved land value of $400,000 to $263,000 for unimproved land value of $15 million. Land tax increased by 12.5% in the 2013 budget.

The 2014 budget saw a big infrastructure spend in Perth's north, with $3 billion to go towards the area. Treasurer Mike Nahan, who said the region was one of Perth's fastest growing areas, committed $641.3 million in public transport and road infrastructure spending to the region.

Over four years, $320 million will be spent on extending the Mitchell Freeway from Burns Beach Road to Hester Avenue. The extension is intended to relieve traffic from Clarkson, Butler and Jindalee, which are cited by the government as growth areas. With residential developments planned for the northern region, a further $32.9 million over the next two years will go towards extending the northern suburbs rail line to Butler. A section of the Reid Highway will be turned into dual carriageways, costing $43 million.