WA homeowners hit with land tax increase

Land tax in Western Australia will increase 12.5% as the Barnett government delivers a budget that attempts to reign in debt.

Treasurer Troy Buswell said most home owners’ land tax bill would not increase by more than $70, due to a forecasted decrease in property value growth, but the increase has been attacked by the peak real estate body in WA.

“The majority of taxpayers will only experience a modest increase in their land tax bill. Around 80% of taxpayers are estimated to have an increase of $70 or less (excluding the impact of any land valuation changes),” budget documents say.

“Even after this increase, Western Australia’s land tax rates will remain significantly below those of other jurisdictions.”

The tax increase is set to raise an additional $338 million over the next four financial years.

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Real Estate Institute of WA president David Airey said the tax increase was unwelcome news for property investors.

“This is a kick in the shins for property investors who supply two thirds of rental stock in WA. It will suck an extra $73 million out of their pockets as a punishment for being an investor,” he said.

“These owners already pay rates to local government for the provision of services yet get nothing from the state directly and subsidise government services which benefit the entire community.

“It's a great concern that the government remains so dependent on property taxes to run the state despite the enormous revenue earnings from resources.”

The tax is paid by 112,000 WA business and investment property owners.

A property in Cottesloe worth $500,000 would currently pay $180 per year in land tax plus a metropolitan region improvement tax of $280. Under the new conditions, the owner would pay $200 a year in land tax and the same amount of metropolitan region improvement tax.

Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

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