From tomorrow, Western Australians would start to reap the benefits of a raft of tax reforms and relief measures introduced by the State Government, Treasurer Eric Ripper said today.
Significant benefits for households and businesses would flow from the measures, which included replacing the Stamp Act 1921 with a new Duties Act 2008, abolishing mortgage duty, cutting stamp duty on cars, introducing a new concessionary duty scale for residential property, reducing land tax and harmonising eight areas of payroll tax with other States.
Mr Ripper said the reforms meant that from tomorrow (July 1):
· Stamp duty would be reduced by a total 15 per cent, or more than $2,800, on a median-priced home costing $460,000. The reduction was achieved through a five per cent cut on all property transfers, plus a 10 per cent cut for median-priced residential properties.
· Duty on mortgages would be abolished after being halved on July 1, 2006, saving a total $920 based on an 80 per cent mortgage for a median-priced home.
· Consumers would save a total $450, or 30 per cent, on the licensing of a $30,000 car through the implementation of the second tranche of motor vehicle stamp duty reform. Duty thresholds for people buying vehicles valued at $15,000 - $50,000 were being increased by a total of $10,000 on light vehicles. The first tranche applied from July 1, 2007 and the second $5,000 would apply from tomorrow.
· Land tax changes would reduce cost pressures on rental housing. Tax thresholds would increase by an average 13 per cent - cutting the amount of tax payable - while the two lowest marginal land tax rates applying to properties valued up to $2.2million had been reduced by 33 per cent.
· Business would benefit from a five per cent across-the-board cut in stamp duty on all non-residential property transactions and land tax savings of up to 63 per cent for properties valued at $1million.
“We already have the most generous duty concessions for first homebuyers in the country and I am confident our new concession for residential property along with abolition of stamp duty on mortgages and land tax cuts - will really help homebuyers struggling with high prices,” the Treasurer said.
The reforms would not only help homebuyers and investors, but would benefit tenants through reduced pressure on rents.
Mr Ripper said the Government had also taken action to ensure that in future taxpayers would not have to wait until the start of a new financial year for beneficial decisions to apply.
He said that this was in response to concerns by industry and taxpayers of the gap between the Government’s announcement of tax relief and its implementation.
Subject to the passage of legislation through the Legislative Council in the near future, payroll tax would be harmonised with other States from tomorrow in the areas of timing of lodgement, motor vehicle allowances, accommodation allowances, fringe benefits, work performed outside a jurisdiction, employee share acquisition schemes and superannuation for non-working directors.
Payroll tax grouping provisions would be harmonised 12 months later - from July 1, 2009 - to help ensure that processes were in place to achieve maximum administrative consistency with the other States. This would result in a saving of up to $41,250 each year for degrouped businesses.
“WA initiated and led the payroll tax harmonisation project with other States, which pre-empted the COAG reform agenda in this area,” the Treasurer said.
“These measures will improve the equity of payroll tax and reduce complexity and compliance costs for all businesses.”
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