The Urban Development Institute of Australia (UDIA WA) is calling on the state government to consider a Land Tax Rebate as one of a number of initiatives being proposed by the development industry in order to retain jobs, support construction and sure up project delivery as the economy battles against the impacts of COVID-19.
With jobs in the property and development industry representing 15% of all employment in Western Australia, the industry can play a significant role in softening the economic blow created by the pandemic.
Land tax is an annual tax on land not used as your principal place of residence and impacts both mum and dad investors as well as the property and development industry. The estimated revenue from Land Tax in the state budget for 2019-20 is $789 million.
“This is about jobs and the economy. It’s allowing the industry to redirect those funds into retaining staff directly and also indirectly through the thousands of jobs facilitated by the development industry such as civil contractors, planning and environmental consultants, landscapers, engineers and more,” UDIA WA CEO Tanya Steinbeck said.
“A rebate needs to be one of the key considerations as a lever the state government can pull to save jobs and continue to deliver projects that will keep the economy going throughout this crisis,” Ms Steinbeck said.
“It is important to note, that a Land Tax Rebate would not only benefit industry,” Ms Steinbeck said. “’Mum and Dad’ investors and small landowners will also benefit from this kind of relief.”
“We understand that losing revenue from land tax would be a blow to state government funds, however we believe that there are other sources of revenue that could be pulled forward to fill some of that gap and deliver on infrastructure projects at the same time,” Ms Steinbeck said.
The Metropolitan Region Improvement Fund (MRIF) holds funds sourced from collecting the Metropolitan Region Improvement Tax (MRIT).
MRIT is a special purpose tax used to finance the cost of providing land for roads, open spaces, parks and similar public facilities. It is payable in addition to land tax on property located in the metropolitan area.
“We believe there is over $450 million currently sitting in the MRIF that could be brought forward to fund infrastructure delivery now and provide a stimulus to the state economy,” Ms Steinbeck said.
“It is this type of funding, that the government already has access to, that can be used to boost our economy now and keep people in jobs,” Ms Steinbeck said.