State budget changes impacting WA property

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2015/16 Western Australian State Budget The Western Australian State Budget was handed down on 14 May 2015.

The Budget Papers are available here.

Details of the new revenue measures are provided below.

Amendments to the Land Tax Scale

From 2015-16, the land tax scale will be revised to:

  • apply a flat dollar amount of $300 to taxable land with an unimproved value above the exemption threshold of $300,000 and up to $420,000;
  • increase land tax rates (except the top rate, which will remain unchanged at 2.67%); and
  • adjust some of the property value thresholds.

Details of the new land tax rates are as follows.

This measure is estimated to raise additional revenue of $184 million in the financial year ended 30 June 2016, and a total of $826 million (or 24.4%) over the four years to 30 June 2019.

Amended coverage of Metropolitan Region Improvement Tax (‘MRIT’)

The 2014-15 Mid-year Review announced that the MRIT would be expanded State-wide from 1 July 2015.  However, the Western Australian Government has now decided that the MRIT will instead be expanded from 1 July 2016 only to regional areas where a region scheme is in place. This will encompass areas within the Peel Region Scheme and the Greater Bunbury Region Scheme.

The combined impact of delaying the expansion of the MRIT and limiting its application to the Peel and Greater Bunbury regions is expected to be $26 million less revenue in the financial year ended 30 June 2016 and a total of $96 million less revenue over the four years to 30 June 2019.

The MRIT is an annual tax based on the aggregated taxable value of land owned (excluding exempt land) at midnight on 30 June which is situated in the “metropolitan region”.  This is a special purpose tax used to finance the cost of providing land for roads, open spaces, parks and similar public facilities.  MRIT is imposed at a rate of 0.14 cent for every dollar of the aggregated taxable value of the land in excess of $300,000.

Increase the Loan Guarantee Fee for Local Governments, Universities and Keystart

To ensure the benefit of the Western Australian Government’s guarantee is appropriately reflected in the costs of borrowing, and to ensure equity with Government Trading Enterprises, local governments, universities and Keystart will be required to pay a Loan Guarantee Fee of 70 basis points on all borrowings through the Western Australian Treasury Corporation.  Keystart will retain its existing pricing policy.

This measure will apply from 1 July 2015, and will raise an estimated $149 million over the four years to 30 June 2019.

Exemption from Transfer Duty for certain property transfers by Incorporated Associations

To facilitate the restructuring of incorporated associations under the proposed Associations Incorporation Act, the Western Australian Government intends to introduce a transfer duty exemption for certain restructures of incorporated associations. The exemption will apply to incorporated associations transferring to another piece of legislation (either State or Commonwealth), amalgamating to form one association, winding-up or having their registration cancelled.

This measure will apply from a date after the commencement of the proposed Associations Incorporation Act. The cost is expected to be minimal (less than $1 million per year) but is unquantifiable.

Increase the payroll tax exemption threshold to $850,000 from 1 July 2016

In the 2013-14 State Budget, the Western Australian Government announced that it would progressively increase the payroll tax exemption threshold to $850,000 from 1 July 2016. It was subsequently announced in the 2014-15 Mid-year Review that the increase in the threshold to $850,000 would be deferred to 1 July 2017.

The Government will now proceed with the original timing of 1 July 2016, which is estimated to cost $21 million in 2016-17 and is expected to benefit around 17,000 businesses.


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