WA Parliament Passes Duties Amendment Legislation
The Duties Amendment Bill 2022 (WA) (the Bill) was introduced into the WA Assembly on 6 April 2022 by the Minister for Finance, Dr AD Buti (the Minister) and as at 19 May 2022 had passed both houses of the WA Parliament and is currently awaiting assent.
The Bill proposes amendments to the Duties Act 2008 (WA) (Duties Act). The Bill seeks to introduce tax simplification measures to reduce the tax burden on some taxpayers and aims to simplify tax administration.
Key Changes Proposed
The Bill aims to align the general and residential property transfer duty rates. The proposed amendments seek to do so by reducing the general rate of duty.
The explanatory memorandum summarises these changes:
"Transfer duty is imposed under the Duties Act on various dutiable transactions, including transfers of land and certain business assets. Transactions involving residential property are assessed at a concessional residential rate of duty while those involving commercial property, land and business assets are assessed at the general rate of duty.
The Bill [proposes amendments to] the general rate of duty that applies to non-residential property to be the same as the concessional residential rate of duty. This change effectively provides that the current concessional residential rate of duty will apply to all dutiable transactions.
The change will benefit taxpayers who transfer non-residential property valued at more than $200,000 up to a maximum $2,800. It is estimated between 3,000 and 5,000 transactions a year will benefit from the reduced rate of duty."
Other amendments proposed by the Bill in this matter includes:
- removal of the concessional residential rate of duty; and
- adjusting the residential or business property concession.
Introduction of Vehicle Licence Duty Exemptions
The Bill also seeks to introduce a vehicle licence duty exemption. This exemption will apply to new service demonstrator vehicles that are loaned to customers having their vehicles serviced at a dealership. As these vehicles are used as a way to entice customers to upgrade, they do not qualify for the current demonstrator exemption. This is because they serve a dual purpose and are acquired solely for demonstration.
The Bill's explanatory memorandum explains:
"This measure will reduce the number of disputes about the issue, more accurately reflect industry practices and resolve the administrative difficulties with auditing dealer exemptions."
The Bill also seeks to introduce an exemption for transactions when a vehicle is returned to the seller for a full refund. This includes refunds of the full purchase price or a replacement vehicle. This amendment seeks to ensure that a consumer does not pay duty a second time when replacing a faulty vehicle.
Abolition of Duty on Prospecting Licences
The Bill also seeks to remove duty on transactions for prospecting licenses, when they do not include any other dutiable property. This amendment aims to simplify the process of transferring these licenses.
Removing Duty for Family Court Orders
The Bill also proposes to exempt family law court orders following a marriage or de facto relationship breakdown from duty. Nominal duty would still apply to eligible transfers of property made under these orders. This will align the duty treatment of family law court orders with financial agreements made under the family law legislation.
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Duties Amendment Bill 2022 (67 of 2022) (WA) and explanatory materials available from TimeBase's LawOne Service