WA state budget fails to deliver broad-based tax reform

The WA government’s headline tax measures were focused on expanded transfer duty relief for first home buyers and broader off-the-plan concessions aimed at supporting housing supply and easing entry costs for purchasers.

It also introduced a new foreign buyers’ duty exemption aimed at boosting housing supply and avoiding unintended impacts on locally based builders with foreign ownership structures.

The exemption applies to transactions entered into on or after 7 May 2026 and is available where a foreign buyer acquires land, constructs new dwellings and sells them within two years of purchase.

BDO indirect tax director Phil Renshaw said the measure is broader than the existing exemption regime, which is limited to significant developments of 10 or more dwellings.

“The new concession is intended to support a wider range of residential development activity that adds to WA’s housing stock," said Renshaw.

However, Renshaw said there was a notable absence in the budget of any broad-based reform or support measures for businesses.

“There are no substantive changes to payroll tax, no broader duty or land tax reform, and no changes to mining or energy royalties. For business, the message is one of stability and predictability — but also missed opportunity,” he added.

“In particular, small and medium-sized businesses remain burdened by what many regard as an inefficient and increasingly outdated payroll tax regime. While the Government has opted against increasing payroll tax settings, it has also declined to provide any meaningful new relief or concessions for employers facing sustained cost pressures.”

Renshaw said that omission is likely to attract scrutiny given the state’s strong fiscal position and continuing surpluses.

“With businesses contending with rising fuel costs, inflationary pressures, higher wages, insurance costs and broader cost-of-living impacts flowing through supply chains and consumer demand, this budget presented an opportunity for the Government to provide targeted payroll tax relief to smaller employers,” he said.

“Even modest measures, such as threshold increases, temporary rebates or expanded exemptions, would have sent a strong signal to the SME sector.”

The WA government, he said, has instead chosen a narrower housing-focused taxation package while leaving the broader state tax framework largely untouched.

The budget also failed to address business transfer duty, despite WA remaining one of only two Australian jurisdictions to retain the tax.

“With an eighth successive surplus, the government had an opportunity to remove a longstanding barrier to business transactions and succession planning.”

“From a tax advisory perspective, the budget is therefore best characterised as a stability budget rather than a reform budget: supportive of housing policy objectives, fiscally conservative, but ultimately limited in terms of broader business tax relief or structural tax modernisation.”