Tourism Planning Taskforce Report - Western Australian Planning ...

Chapter 7Term of Reference 4and managed on a tourism basis. Removal ofthe option for strata subdivision without amandatory requirement for integratedmanagement of units would assist in reducingthe pressure for redevelopment of low-costaccommodation facilities. This will be achievedas parameters for investing in such propertieswill shift from residential real estate intereststo returns based on potential tourismoperations, reducing residential speculationand property value increases. Thismanagement requirement also could limit thepotential for capital raising and the ability forsome sites to be developed or upgraded.The controls that apply to tourist zonesthroughout the State vary in their permissibilityof residential use. Rezonings also have beenundertaken to permit residential use wherethis was inconsistent with the base tourismzoning. This has affected the marketperception of tourism sites, with a premiumpaid on high-amenity sites, taking into accountthe potential of achieving a residentialcomponent. While this effect has been valuedby the VGO as less than that of using a broadtourism zoning structure, it is still a contributorto redevelopment pressure on low-costaccommodation sites. The taskforce hasdetermined that potential exists to reduce thiseffect through the introduction of specificcriteria and a strategic framework limiting theconditions under which a residentialcomponent on a tourism site would beconsidered. This will provide increasedconfidence as to the extent of residentialdevelopment that will, or will not, be approvedon a site. In conjunction with guidelines for thedesign and form of such residentialcomponents this will reduce the effect ofresidential speculation further.7.3.3 Summary of potentialresponsesThe taskforce has found that the effect ofrapidly increasing land tax in some regionalareas has had a disproportionate effect onlow-cost forms of tourist accommodation andhas increased redevelopment pressure onthese sites through the necessity to achievegreater income-earning potential. It wasconsidered that this had, and would continueto have, a negative impact on the range andaccessibility of accommodation available inbeachfront recreation areas.The introduction of a permanent residentialcomponent in tourism developments and thestrata titling of tourism development werenoted as having an impact on the valuation oftourist zoned land and the corresponding landtax levied. It also is evident that the impact ofthese factors is less than the impact thatresults from the use of a broad tourism zoningin local government planning schemes or thebenefit that potentially can be achieved by theintroduction of a more detailed tourist zoningstructure.The taskforce recommendations for theidentification of strategic sites and theirretention for tourism development will, in part,address these issues. (See Chapter 8). It alsowill result in a continued holding requirementover some sites. Where such sites are yet tobe zoned for tourism purposes and form partof a rural landholding, this is not considered asignificant issue. However, there will bestrategic sites zoned for tourism purposeswhich are not ready for development, due tolack of immediate demand or high cost ofservicing. In such cases, this delayeddevelopment potential should be recognisedthrough the zoning system, which may beachieved through a deferred zoning concept.Ancillary benefits of this will be recognition ofthe reduced potential of the land through theland tax valuation process, and an associatedreduction in holding costs.The taskforce considered options available forland tax relief for identified strategic tourismsites based on advice from the VGO andDepartment of Treasury and Finance. Thepursuit of tax relief options was seen asgenerally outside the scope of the taskforce,although acknowledged as the mostappropriate avenue for dealing with land taxissues.7.4 Goods and services taxThe introduction of the Goods and ServicesTax (GST) is argued to have had a detrimentaleffect on investment in strata titled tourismdevelopments. This arises under most stratascheme structures as GST is payable on thepurchase price of units and expenditure by60 Tourism Planning Taskforce Report