UDIA WA State Budget 2025/26 Overview

According to the Treasurer’s speech at the State Budget Lockup in Dumas House this morning, WA remains the economic powerhouse of the nation.  This is in the context of increasing global uncertainty and conflict.

In outlining an operating surplus of between $2.4 and $2.8 billion, the Treasurer reinforced the need for budget conservativity and economic diversification through the previously announced ‘Made in WA’ plan.

There is also a $14 billion overall investment to ‘boost housing supply in Perth and the regions’.

With little surprises in this year’s budget, the ‘new news’ includes $101 million allocated under the Housing Enabling Infrastructure Fund (HEIF) and $4 million for the new Housing Approvals Unit in the Department of Water and Environmental Regulation (DWER).

The Unit has been established to ‘improve the timeliness of environmental and water approvals for significant greenfield and infill housing developments.’

The Treasurer also touted an infrastructure investment ‘pivot’ to utilities, health, education and housing, with the government’s mantra throughout the budget focused on ‘poles, wires, pipes and ports.’

With a focus on housing supply and cost of living measures, the Government is expecting the housing market to return to a more ‘balanced’ position over the forward estimates, with a perhaps optimistic outlook for the median house price growth to decelerate down to 4.3% in 2025/26 compared with 18% growth in 2024/25.

This is perhaps based on the positive expectations around the impact of supply side initiatives and take up of opportunities resulting from greater support for first home buyers entering the market at both a State and Federal level.

During her presentation at the budget lock up this morning, the Treasurer also stated she has a ‘passion’ for driving greater focus on the new Keystart Shared Equity product aimed at town homes, apartments and modular builds.

Headline Economic Indicators in the 2025/26 State Budget include:

• 3.4% growth in the WA State Economy over the past year – the strongest of all States
• Growth is expected to moderate to 2.5% by 2025/26
• Net Debt expected to hit $33.6 billion by 30 June 2025
• Average unemployment rate of 3.75% expected in 2025/26
• Population growth forecast to ease to 1.9% in 2024/25 and 1.8% in 2025/26
• Electricity and water charges set to increase by 2.5% (just under CPI)
• $38 billion in infrastructure investment over the forward estimates

Housing related statistics underpinning the State Budget 2025/26 include:

• Perth median house price growth is expected to ease to just 4.3%, compared with 18% growth in 2024/25
• Building approvals were up 45% (highest in nation currently)
• Housing completions up 18%
• Rental vacancy rate up to 2.8% in May 2025
• Dwelling investment grew by 4.6% in the year to the March quarter 2025, building on growth of 4.2% in 2023/24.
• Pace of dwelling investment expected to accelerate in 2025/26 from 5% to 9.25% in 2025/26, largely driven by increased government investment in social and affordable housing.  

Headline spend:

• General government expenses are estimated to total $47.8 billion in 2025/26, an increase of $2 billion (or 4.3%) on 2024/25
• $963 million on Cost of Living
• $1.4 billion in housing
• $38 billion in infrastructure investment over 4 years
• $1.8 billion investment in education and training, including $141 million to Construction Training Fund/ residential construction initiatives
• $107 million to expand Swan River Ferry Expansion
• $10 billion in regional infrastructure including $198 million to double the GROH construction program in regions

Industry related details in the State Budget 2025/26 include:

PROPERTY TAXATION

Total Transfer Duty

• Total transfer duty is estimated to reach $3.4 billion in 2024/25
• Transfer Duty is forecast to decline by 5.8% (or $196 million) in 2025/26, reflecting an anticipated moderation in residential property market conditions.
• Duty is forecast to decline by around 7% per annum in 2026/27 and 2027/28, and stabilise at around $2.8 billion from 2027/28
• While the strong property market conditions of recent years are anticipated to ease, the impact of slower population growth and moderating transactions is expected to be partly offset by elevated property prices, supporting high levels of overall duty.

First Home Owner Transfer Duty Concession

• There was a Government cost of $8.3 million in relation to the First Home Owner Transfer Duty Concession in 2024/25 and that is forecast to increase significantly in 2025/26 to $31.2 million to reflect increased purchase price thresholds and Federal Government incentives.

As previously announced, changes to the Concession for transactions entered into on or after 21 March 2025 include:

• a transfer duty exemption for purchases up to $500,000 (up from $450,000);
• for purchases in the Perth and Peel regions, a concessional rate of duty for purchases up to $700,000 (up from $600,000); and
• for purchases outside the Perth and Peel regions, a concessional rate of duty for purchases up to $750,000 (up from $600,000).

In addition, first home buyers that purchase vacant land statewide will receive a transfer duty exemption on purchases up to $350,000 (up from $300,000) and a concessional rate of duty for purchases up to $450,000 (up from $400,000).

This measure is estimated to reduce transfer duty revenue by $119 million across 2024-25 and the forward estimates period, supporting around 5,500 first home buyers per annum.

Increased Land Tax Relief for Build-to-Rent Developments

As also previously announced, the land tax exemption for eligible projects that become operational (i.e. able to be lawfully occupied) between 1 July 2025 and 30 June 2028 will increase from 50% to 75%.

The budget papers state that this measure is expected to have a negligible impact on forecast land tax revenue.

The increased land tax exemption of 75% will apply for the first three assessment years only, after which the exemption will revert to its original setting of 50%. This means that 2030-31 will be the final year when a 75% land tax exemption can be applied to an eligible project that became operational in 2027/28.

The measure is intended to further encourage investment in the build-to-rent sector, increase the supply of long-term rental housing and improve housing affordability and availability across Western Australia.

Off the Plan Transfer Duty Concession

There is a $5.6 million cost projected in 2025/26 and $6.8 million the following year allocated to the Concession. The Government has extended the off-the-plan transfer duty concession by 12 months, from 30 June 2025 to 30 June 2026.

In addition, for eligible pre-construction and under construction transactions entered into on or after 21 March 2025, the Government has:

• expanded the concession to off-the-plan dwellings on single-tier strata schemes and community title (building) schemes (excluding survey-strata schemes), including townhouses and villas; and
• increased the concession’s lower and upper property price thresholds to $750,000 and $850,000 (up from $650,000 and $750,000 respectively).

As a result of the changes, eligible pre-construction contracts will receive a 100% concession on properties valued up to $750,000, phasing to a 50% concession for properties valued at or above $850,000 (capped at $50,000). For eligible under construction contracts, the concession instead phases down from 75% to 37.5%.

The combined impacts of these changes, which were provisioned in the 2024/25 Mid-year Review, will reduce transfer duty revenue by an estimated $23.7 million across the forward estimates period and the Department of Finance will spend $260,000 in 2024/25 on the required system changes.

INFRASTRUCTURE FUNDING

$101 million for the first round of the Housing Enabling Infrastructure Fund for power, water and wastewater infrastructure to facilitate housing supply has been allocated in this financial year. 

The list of projects allocated funding include:

Other significant infrastructure spending includes:

• $460 million (of a total $700 million investment to 2029-30) to widen the Kwinana Freeway in both directions between Roe Highway and Mortimer Road, which will support the future operations of Westport and ease traffic congestion
• $163 million over 2025/26 to 2028/29 to further progress the Westport program of works, including detailed project planning and social and environmental initiatives, and a further $460 million to 2028/29 ($700 million in total) to be invested to upgrade Kwinana Freeway in support of the future port’s operations
• $2.8 billion on the Alkimos Seawater Desalination Plant;
• $2.5 billion for Synergy’s battery storage systems at Kwinana and Collie
• $1.3 billion over the forward estimates period for water, wastewater and drainage

ENVIRONMENT

• $4 million has been allocated over the forward estimates period to fund the Housing Approvals Unit within the Department of Environment and Water Regulation to improve the timeliness of environmental and water approvals for significant greenfield and infill housing developments
• $5 million more has been allocated to the EPA across the next three years to manage Environmental assessments
• A total of $6.9 million has been committed over the forward estimates period for the Treebates and Urban Canopy Program to help reach the Government’s goal of doubling Perth’s urban tree cover to 30% by 2040
• $3.6 million over the forward estimates period for continuing the implementation of Deemed Decision Making to further streamline the processing of environmental approvals, ensuring the Government’s commitment to Streamline WA as part of the independent review of WA Environmental Approvals Processes and Procedures (Vogel-McFerran Review)
• $18.5 million over the forward estimates period has been provided to the Environmental Protection Authority (EPA) to increase Board membership, resourcing and accommodation, which aims to improve the governance, co-ordination and delivery of services, and address any backlog of environmental assessments.
• Increased resourcing of $7.6 million has been provided for the Office of the Appeals Convenor

CONSTRUCTION WORKFORCE ATTRACTION & RETENTION

• The Construction Visa Subsidy Program and Build a Life in WA program has been funded into 2025/26 to support businesses with the cost of employing skilled migrants and assist qualified workers from interstate and New Zealand to move to Western Australia to take up building and construction jobs
• $25.2 million to continue the Group Training Organisation Wage Subsidy Program
• $21.9 million that will expand Fee-Free TAFE to include additional building and construction courses
• $11.5 million to support new apprentices under the AUKUS Defence Industry Incentive Scheme
• The Adult Apprentice Incentive program will invest $14.6 million (to 2032/33) for 400 places to provide employers and Group Training Organisations with financial assistance to employ mature-aged apprentices in building and construction

SOCIAL AND AFFORDABLE HOUSING

• A further $246 million top-up to the Social and Affordable Housing Investment Fund (SAHIF), bringing the total allocation to the SAHIF to $1.9 billion since 2021/22 to support the delivery of more than 5,800 homes.
• $6 million for the Community Housing Capability Program

View the State Government Budget Papers here.