THE WEEKEND WEST
Not enough is being done to create more significant stimulus measures for the struggling property market, according to UDIA WA CEO Tanya Steinbeck.
Ms Steinbeck’s view came off the back of the Western Australian State Government’s handing down of the 2019-2020 Budget last Thursday, during which WA Treasurer Ben Wyatt announced WA’s first surplus in five years of $553 million and a $4.1 billion reduction in state debt.
While welcoming temporary increases to Keystart thresholds, expenditure on Metronet, redevelopment plans for the East Perth Power Station and other major road infrastructure, Ms Steinbeck said the State Government’s revenue, via property taxes in particular, would be boosted considerably if the recovery of the property market was further supported.
“The property industry has a significant impact on the WA economy, contributing approximately $21 billion to gross state product in 2017/18,” she said.
“Therefore, measures to support households can also significantly boost our economy and local jobs.
“The budget papers on one hand recognise the decreased revenues that have resulted from ongoing weaker property market conditions and, on the other hand, make predictions in the forward estimates about projected increases in revenue that are expected to come from sources such as transfer duty.”
“The budget papers one hand recognised decreased revenues that have resulted from ongoing weaker market conditions and, on the other hand, make predictions in the forward estimates about projected increases in revenue that are expected to come from sources such as transfer duty.”
A NEED FOR CHANGE
The woes of the WA property market are now an all-too-familiar tale for Western Australians, signalling the need to introduce bold reforms to help our local market and economy recover, according to REIWA president Damian Collins.
REIWA put forward six key recommendations in its pre-budget submission aimed at helping create a fair, sustainable and prosperous local property market.
They were:
– No increases to transfer duty rates and no changes to thresholds.
– Maintaining the stamp duty exemption for first homebuyers at $430,000 and re-introducing a $7000 First Home Owner Grant for purchases of existing dwellings.
– The introduction of a $10,000 concession on stamp duty for seniors over the age of 65 to enable them to right-size into more suitable accommodation.
– No further changes to rates or thresholds for land tax.
– Revoking the introduction of the Foreign Owners Duty Surcharge (FODS) to keep WA property competitive.
– Undertake a state tax review to assess the viability and financial implications of a shift to a broad-based land tax system that ultimately removes transfer duty.
Mr Collins said while REIWA was pleased the McGowan Government had resisted the temptation to increase property taxes, the allocation of the 2019-2020 WA Budget was mostly uninspired.
“Treasurer Ben Wyatt has considerably revised the state’s economic position due to WA’s increased share of the GST and the surge in commodity prices,” he said.
“This influx of funds should go towards reducing state taxes, particularly stamp duty, and helping first homebuyers get into the market through the reintroduction of the First Home Owner Grant for established properties.”
REIWA was also disappointed the McGowan Government doubled down on the seven per cent FODS, despite the tax having negatively affected building and off -the-plan sales since it was implemented in January 2019 and having raised less than 10 per cent of last year’s estimations.
STAMP DUTY CONCESSIONS
UDIA and REIWA both voiced the need to see a stamp duty concession introduced for seniors looking to downsize into more liveable homes.
“Our industry has been crying out for an initiative to kickstart transactions; giving seniors a helping hand will have positive ramifications for everyone, as it frees up valuable housing stock for young families,” Mr Collins said.
Ms Steinbeck said she hoped Mr Wyatt stayed true to the advice he gave by considering a senior’s stamp duty concession as state finances continued to improve.
“As well as ensuring seniors live in homes suitable for their needs, broader government revenues would benefit from a concession on stamp duty, given the greater market activity it would generate,” she said.
“Not to mention it will free up more homes for younger families to access.”
REIWA also called on the WA Government to implement real, long-lasting change by phasing out stamp duty in favour of a broad-based land tax that is paid in smaller annual amounts rather than as an upfront payment.