WA Property Owners Face Huge Land Tax Bills

It looks like WA property owners are also facing huge increases in land tax bills. At least in NSW the announced the changes to land tax, WA landowners are being caught by stealth!

Land tax increases of up to 400% have landlords in Perth and elsewhere in WA seeing red. The bills are increasing because the Office of State Revenue is increasing the assessed value of the property.

To make matters worse if you the owner has multiple properties the tax is levied at a the rate of the combined properties, not on the appropriate rate for each property.

On the face of the increases are insane – particularly when you remember Perth has had a flat market for the last year or so. The West Australian is reporting that one owner of industrial properties, Joe Pintaudi was faced with:

The assessed value of my properties has gone up from $4.6 million to $9.5 million in the past year. That is ridiculous. Mr Pintaudi said his rents would have to rise by 25% to cover the $67,000 land tax bill

The Property Council of Australia wants the government to introduce reforms that include placing a cap on the percentage increases and land tax to be applied to individual properties, not aggregated values.

The reality is that its pretty crazy that states charge land tax at all. Wasn’t it supposed to have disappeared with the introduction of GST in 2000?  And if you are going to have a tax based on property values then it should be an independent organisation that is assessing the property’s value – otherwise this type of rort is just waiting to happen.

The reality is that the landlord who does try to hike his rents 25% is not going to be in business for long in the current economic climate, where many small businesses are folding  as the mining industry cash cow drys up. Even keeping the tenants at their current commercial rate might be an issue.  This is not a good time to be a commercial or industrial property investor in WA