The 2008-09 State Budget would deliver tax relief for the fifth year in a row with a $1.2billion package that would slash almost $3,000 from the cost of an average home, Treasurer Eric Ripper said today.
Mr Ripper said the package included a reduction in stamp duty for residential property which will cut duty by 15 per cent for a median-priced home, cuts to land tax and a reform of payroll tax to ease the compliance and tax burden on business.
“From July 1 this year, the duty payable on a median-priced house will fall 15 per cent, representing an average saving to homebuyers of $2,828,” the Treasurer said.
Mr Ripper said the State Government would achieve the reduction through a combination of increased property value thresholds and a five per cent rate cut included in the recently enacted Duties Act.
He said the Budget stamp duty cuts would save the State’s taxpayers $487million over four years.
The Treasurer also said the land tax exemption threshold would be increased $50,000 to $300,000 from July 1, which meant that on top of measures in last year’s Budget, the Carpenter Government had doubled the land tax exemption threshold in just 12 months.
“Increases in other land value thresholds, cuts in some of the land tax rates, and a cut in the Metropolitan Region Improvement Tax rate from 0.18 per cent to 0.15 per cent, will help limit aggregate tax increases to the average growth in land values. In other words, so-called ‘bracket creep’ caused by rising property values will, on average, be fully offset,” Mr Ripper said.
“The cuts in stamp duty on the purchase of residential properties, the reduction of growth in land tax and the reduction in Metropolitan Region Improvement Tax bills will make an important contribution in the battle to make housing more affordable.
The package also extended to payroll tax, Mr Ripper said.
“Payroll tax harmonisation reforms will deliver compliance cost savings to businesses that operate across State borders,” he said.
“And, from July 1 next year, commonly-owned businesses that operate independently will each be able to claim the exemption threshold on payroll tax, through de-grouping.”
Mr Ripper said the payroll tax reforms would bring Western Australia into line with other States and provide a payroll tax saving for de-grouped businesses of up to $41,250 a year, while helping ensure competitive neutrality with other stand-alone businesses operating in the same industry.
“These reforms are expected to save WA businesses about $164 million over the next four years,” he said.
The Treasurer said the Government would also bring forward by six months the $5,000 increase in general motor vehicle stamp duty thresholds announced in last year’s Budget to July 1 this year - an estimated saving of $225.00 (18 per cent) on a $30,000 car.
“The Carpenter Government has now delivered six rounds of tax relief. We now have a fairer, simpler and more competitive tax system and, as a share of the economy, Western Australia’s tax burden is the second lowest of all States, behind only Tasmania,” Mr Ripper said.
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