How much tax do you think you should pay when you buy commercial property on the Gold Coast? As a country, a significant amount of taxes are generated through the purchase of real estate. CoreLogic RP Data broke down Australian Bureau of Statistics figures and found that in the 2013-2014 financial year, a total of 48.7 per cent of taxes generated by state and local governments were through property.
That's a record $40.485billion in property tax over a single year. For comparison, taxes through employers totaled $21.341billion. Property taxes rose by 12.6 per cent on an annual basis, showing the significance of these taxes as well as the increased real estate activity of late.
Chief among these is stamp duty, which the Housing Industry Association has been speaking out against for some time now.
"There is no question that stamp duty is one of the key offenders, with research undertaken last year for HIA by Independent Economics identifying it as is the most inefficient tax in Australia's entire taxation system," stated Graham Wolfe, HIA chief executive for industry policy and media.
But a new move has broken ground in South Australia, that could spell wholesale changes for those interested in commercial property for sale on the Gold Coast.
The South Australian government budget was released one 18 June, and it contains the landmark abolition of stamp duty on all non-residential real estate transactions. Once July 18 comes around, every business transaction for real estate in SA will be stamp duty-free.
The SA division of the Property Council of Australia has welcomed this change with open arms, as branch chief executive Daniel Gannon noted in a 19 June media release.
"Taking an axe to stamp duty on non-residential property transfers sends a strong message of confidence to South Australia's small- and medium-sized enterprises," he noted,
"But importantly, commercial stamp duty abolition will ensure boards across the country will sit up and pay attention to our state's property market."
It's a move which could have far-ranging repercussions, and could perhaps inspire local and state governments to push for a similar move here in Queensland. This would make it much more financially viable to enter retail leasing on the Gold Coast.
The Australian Chamber of Commerce and Industry (ACCI) is another body which is thrilled with this abolition of stamp duty on non-residential property, and CEO Kate Carnell hopes to see it occur elsewhere in Australia – which would include for commercial leasing on the Gold Coast.
"Other states should consider following South Australia's lead and free up their own economies from the constraints of stamp duty, which increases transaction costs and lowers transaction volumes."
According to Ms Carnell, the cuts to stamp duty will reduce revenue by $670million, but in the long run will create $2.5billion of economic activity for South Australia. She applauded this long-term vision, saying it is the right way to move forward.
She added that stamp duty is a barrier between commercial properties and those who value them the most, and that this change will allow many more people to enter the market with their business.
If you have been seeking commercial property for sale on the Gold Coast to open up a new shop front or perhaps expand an existing business, this announcement will be music to your ears. Less taxes mean less hurdles to clear to secure real estate, and if the rest of the country follows South Australia's lead then more affordable real estate could be just around the corner.
For now, there remains excellent value for money right across the Gold Coast. To find out more about the local market, make sure to contact us at Ray White Surfers Paradise.