The failure of the WA government to introduce stamp duty concessions for older citizens looking to downsize was a “lost opportunity”, according to the Real Estate Institute of WA (REIWA).
Responding to yesterday’s state Budget, REIWA president David Airey said while the industry would welcome the state government’s initiatives on affordable housing along with cuts to payroll tax, he was disappointed there were no stamp duty concessions for older citizens looking to downsize their housing.
“This was a lost opportunity to free-up housing capacity at a time when supply is tight,” he said.
“Many older people live in big family houses long after their children have left, and which they can’t afford to maintain because they don’t have the cash to fund the changeover.
“This prevents many people from moving to more affordable and appropriate dwellings, and in doing so they free-up more stock to the market,” Mr Airey said.
This was particularly important in a Perth rental market “under enormous pressure,” he said.
According to REIWA’s March quarter figures, Perth’s vacancy rate data was at 1.9 per cent, well below what it said was the “accepted equilibrium” of three per cent.
REIWA said its analysis of the budget papers indicated that property buyers would carry much of the burden of the shortfall in GST revenues as the government, by not indexing thresholds, would reap the windfall gain from projected price and sales volume increases.
“The government anticipates receiving $6.6 billion in stamp duty payments over the next four years with almost $2 billion projected in 2015-16 alone.
“Hopefully the government will see fit to reform these tax thresholds before then so that buyers don’t get caught in bracket creep,' Mr Airey said.
On a positive note, Mr Airey said he was first home buyer stamp duty concessions remained intact.
“This [policy] has been successful in maintaining first homebuyers at around 25 to 27 per cent of the market over the past twelve months,” Mr Airey said.
“The importance of the stamp duty concession for first homebuyers in the modest market recovery currently being experienced cannot be underestimated.”
Mr Airey said many REIWA members would also be pleased that the government has removed payroll tax for small businesses with a payroll of up to $1.5 million.
“This removes an unnecessary impost on small business profitability,” Mr Airey said.