Land Tax Reform Needed to Keep WA Growing

The land tax system in Western Australia needs urgent reform to make the state more competitive with other states in attracting business investment and growing WA.

“WA has the most complicated land tax system as well as an effective rate of tax that is much higher than most of the other states that we are competing with,” WA Property Council Executive Director Lino Iacomella said.

“WA currently has the second highest top marginal rate of land tax in the country – 2.67%. In NSW and QLD the top marginal rate of land tax is 2%, and in Victoria it is 2.25%.  Only South Australia has higher land tax rates.   The land tax burden on property investors in Perth is further compounded by the addition of the Metropolitan Regional Improvement Fund (MRIT) which adds a further 0.14% to make the effective top marginal land tax rate 2.81%. 

“The WA land tax structure also has the greatest number of tax thresholds – seven.  In NSW there are only three thresholds.  The large number of tax thresholds in WA worsens the dreaded aggregation factor.  Landholdings are aggregated for land tax assessment and the large number of tax thresholds heightens the risk of being pushed up to higher land tax rates when assessments are done each year. 

“WA’s complex land tax system and the high top marginal tax rate, has created a land tax squeeze in WA where fewer than 10% of tax payers pay more than 80% of total land tax.

“If we are serious about broadening the economy and growing WA then state policy makers need to prioritise economic reforms and make our land tax structure more competitive with other major states.  This can be achieved by reducing the top marginal rate of land tax and moving to a flatter structure with fewer tax thresholds.

“The Property Council will call on all the parties contesting the upcoming state election to support reform of our antiquated land tax system, make the state more competitive with other states and keep WA growing.”