Afterfour years of record low transactions, culminating in the lows of 2019 wherethere was a 55 per cent decrease in the number of sales compared to 2005, its clearthat the property industry needs stimulus to attract buyers and investors backinto the market.
REIWAPresident Damian Collins said the Western Australian property market is anintegral part of the states economy which provides housing and a regularsource of income for the State Government of WA.
REIWAsplan for prosperity post COVID-19 outlines recommendations that we believe willhelp boost the economy and enable more people to enter the property market, MrCollins said.
Reform stamp duty to boost WAs economic recovery
REIWAis calling on the WA Government to commit to a full state tax review andfeasibility study of a two-stream revenue collection approach to stamp duty.
Atwo-stream approach would allow buyers to decide whether to pay the stamp dutyupfront, or whether to opt in for an annual fee for the duration of ownership,with the reduction in upfront costs encouraging more transactions with asignificant flow on effect to economic activity, Mr Collins said.
Introduce a $10,000 stamp duty concession for seniors over the age of 65to encourage appropriate right sizing
Notonly is stamp duty a hindrance to affordability, it limits households abilityto make appropriate housing decisions in accordance with their lifestylechoices, changing needs or economic reasons.
Inorder to ensure WA has the right mix of housing options and diversity to meetthe changing needs of the community, REIWA recommends that seniors householdsshould be given the opportunity to right size and free up their existinghousing by obtaining a concession on stamp duty costs for their next home, MrCollins said.
Formalise the stamp duty rebates for off-the-plan-purchases
Thecurrent 75 per cent stamp duty rebate for buyers of off-the-plan and underconstruction apartments has been vital in ensuring an ongoing pipeline ofprojects, which in turn ensures a steady supply of diverse housing and jobs forWest Australians.
If aperson bought an off-the-plan apartment prior to the rebate they paid stampduty on the combined value of the land and the build, compared to ahouse-and-land package that is taxed solely on the value of the land.
Tokeep off-the-plan apartments in line with house-and-land packages, REIWArecommends making the 75 per cent rebate permanent.
Remove stamp duty on the purchase of small businesses
WA isone of three states or territories that continues to collect stamp duty on abusiness purchase. A buyer who purchases a business to a value of $5 millionwill be liable for $251,415 in stamp duty.
Ifstamp duty was abolished for the purchase of a small business, the potentialsaving could go towards employing five staff members on a full-time basis or 10apprentices.
Withbusinesses facing even bigger challenges due to the impacts of COVID-19, weneed to be encouraging people to buy small businesses which will createmuch-needed jobs, generate additional spending, as well as giving a helpinghand to those who need to sell.
Reintroduce the $7,000 first home owner grant for the purchase ofexisting dwellings
In2019, the number of first home buyers reached its lowest levels since 2011 atjust 13,653 and of those, 8.285 were for established properties and 5,368 werenew homes.
Allowingfirst home owners access to the $7,000 grant for established homes couldincrease their purchasing power and encourage more buyers, resulting in morestamp duty from the trade-up market. Mr Collins said.
Readthe full submission made to the WA Government here.
