- REIWA urgently calls for greater flexibility in legislation to help small businesses
- Calls for amendments to stamp duty for small businesses
- Calls for reviewing regulation that stifles innovation
The Real Estate Institute of Western Australia (REIWA) has called for regulatory reform aimed at helping small businesses ahead of the WA election.
“As things begin to return to normal after lockdown, it has become apparent that a refreshed legislative framework is needed to ensure business can readily adapt to the new norm and it is why REIWA is calling on commercial real estate to be a priority,” said Mr Damian Collins, President of REIWA.
Abolish stamp duty for small businesses
REIWA recommends a staged approach to abolish stamp duty collection on the purchase of small businesses.
Mr Collins says having WA as only one of the three states or territories that continues to collect stamp duty creates additional cost burdens, making the state less attractive for investment and overall less competitive.
“Currently, a buyer who purchases a business to a value of $5 million will be liable for $250,000 in stamp duty which can equate to five local, full-time jobs or up to ten trainees in sectors such as childcare, retail and hospitality.”
In response, REIWA recommends that stamp duty be amended so that there is an exemption for the sale of small businesses up to $5 million.
“The WA Government has made a commitment to boost West Australian jobs and increase investment in our state, with this initiative a prime example of not only doing this but also encouraging investment in small businesses,” said Mr Collins.
Review the Commercial Tenancies (Retail Shops) Act
Mr Collins argues that the Commercial Tenancies (Retail Shops) Act is “outdated”, and one of the primary causes for the high vacancy rates seen across Perth.
As online stores have continued to dominate the retail sphere, brick-and-mortar vendors look to rival their competition. As a result, pop-up shops and short-term initiatives have become more commonplace in recent years.
Mr Collins says the burdensome regulation imposed by the Act has hindered many vendors from competing in the market, stifling them from adopting new and innovative ways to do business.
“With a five-year minimum tenancy required, unless an exemption has been provided by the State Administrative Tribunal (SAT), commercial owners are inhibited from filling empty shops on a short-term basis and potential retailers are prevented from having the opportunity to test their business before committing to a long-term arrangement.”
REIWA has called on WA parties for urgent reform of the Act to enable greater flexibility in the length and conditions of retail leases.
REIWA has made other recommendations regarding rental shortages and fairness for renters and lessors. The full report is called Western Australian Election 2021: A roadmap to a fair and prosperous property market – REIWA submission January 2021 (available online).