REIWA has been a long-time advocate for stamp duty reform.It is an inefficient tax that acts as a handbrake on the economy and is a hugebarrier to home ownership.
In the short term, it appears unlikely that major stampduty reform will happen in Western Australia. The Premier made it clear duringhis 2021-22 WA Budget announcement that his government had no intention ofimplementing major tax reform during the pandemic.
Whilst we can appreciate these are uncertain times and adegree of caution is required as we transition to living with COVID-19 in thecommunity, it feels like a missed opportunity to take stamp duty reform off thetable altogether given the states enviable financial position.
A quick win for small business
One quick win that would not require a major overhaul ofthe entire tax system is removing stamp duty from small business sales (definedas those entities with business assets worth less than $10 million or an annualturnover of less than $5 million).
WA is one of the only states in the country that stillimposes stamp duty taxes on small business purchases. Victoria, New South Wales,Australian Capital Territory, Tasmania and South Australia have all implementedcomplete stamp duty exemptions for purchases of small business assets. Itstime WA does too.
Stamp duty is an unnecessary cost burden for smallbusinesses
Whilst overall WA has been incredibly fortunate throughoutthe pandemic, those who have been hit hardest by lockdowns and restrictionshave been small businesses. They need our support more than ever, especially asborders open and some restrictions return.
Under our current laws, a buyer who purchases a WA smallbusiness with assets worth $5 million is required to pay $251,415 in stamp duty.If stamp duty on small businesses were to be abolished, the potential saving of$251,415 could go towards employing five full-time staff members or training 10apprentices.
As one of the only places in the country that stillcollects stamp duty on business assets, we are creating a business environmentthat is less competitive than the eastern states and placing a cost burden onsmall businesses which discourages productivity and the entrepreneurial spirit.
Its crucial the WA Government implement policies thatboost productivity. With more people making career changes than ever before, weneed to pave the way for those who want to have a go.