Commercial and residential property investors will be slugged with an extra $826 million over the next four years after State Treasurer Mike Nahan made land tax increases the centrepiece of the State Government’s revenue raising efforts in this year’s State Budget.
This year’s move follows a 10 per cent increase in land tax rates in last years budget.
The land tax applies only to commercial property and residential investment properties, not a homeowners primary residential property.
The State Government expects to raise an extra $184 million next year by introducing a $300 flat tax for land with an unimproved value of between $300,000 and $420,000, and lifting land tax rates on most properties valued above those levels.
Currently investment property is taxed at a rate of 0.11 per cent of its value above $300,000, at 0.58 per cent above $1 million and at 1.51 per cent above $2.2 million.
Property with an unimproved value of less than $300,000 will remain free from land tax, but smaller retail investment property owners who own property worth just a dollar more than that amount will now be slugged a $300 flat fee.
Only the top rate of the current land tax scale, the 2.67 per cent levied on the value of land above $11 million, remains unchanged in the State Budget.
The State Government now expects to collect $939 million in land tax next financial year, up 26 per cent.
Mr Nahan said yesterday despite the additional charges to investors, WA’s land tax regime remained “competitive” with those in other states.
He said a landholding with an unimproved value of $1 million would be levied $1750 in land tax next year, up from $770 currently. That compares to $9188 in NSW, $2975 in Victoria and $4500 in Queensland, he said.