11 Sep 2017
WA budget update – new foreign owner duty surcharge on the way
By Keshni Maharaj, David Wong
A new foreign owner duty surcharge, tiered royalty rate for gold, and progressive payroll tax scale are all on the way for Western Australia.
On 7 September 2017, the Western Australian 2017-18 budget papers were released. The major proposed revenue changes are as follows:
From 1 January 2019, there will be a 4% foreign owner duty surcharge on purchases of residential property by foreign individuals, corporations and trusts. This surcharge is in addition to the usual amount of duty payable on property acquisitions (the current top rate being 5.15%). The budget papers provide that the surcharge will not apply to:
- residential developments of ten or more properties;
- commercial residential property such as hotels, student accommodation, retirement villages; or
- mixed use properties that are used primarily for commercial purposes.
From 1 July 2018 there will be a new progressive payroll tax scale which will be in place for five years. Employers with Australia wide payrolls between $100 million and $1.5 billion will be taxed at a marginal rate of 6%. Employers with a payroll exceeding $1.5 billion will be taxed at a marginal rate of 6.5%. Employers with payrolls of $100 million or less will not be affected.
From 1 January 2019 there will be a wagering tax reform. This new tax will be a point of consumption tax, replacing all current wagering tax arrangements and set at a rate of 15% of net wagering revenue.
From 1 January 2018 there will be a tiered royalty rate for gold. The current rate of 2.5% will apply for each month when the gold price is A$1,200/ounce or less. A rate of 3.75% will apply when the price is above A$1,200/ounce. From 1 July 2018 the gold royalty exemption for the first 2,500 ounces will be removed.
The papers also indicate that a State-based major bank levy is being considered.