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The head of a property institute is disappointed with the latest state budget for Western Australia as he believes there was not enough of a focus on property.
The Western Australian budget was announced on Thursday, with WA treasurer Ben Wyatt revealing that the state has had its first surplus in five years of $553 million. But for Damian Collins, the president of the Real Estate Institute of WA, there was a lack of attention placed on the property market.
“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. This influx of funds should go towards reducing state taxes, particularly stamp duty, and helping first home buyers get into the market through the reintroduction of the First Home Owners Grant for established properties,” Mr Collins said.
“With the coffers fuller than we could have imagined just a few years ago, now is the time for the WA government to step up and lead not only the state but the country and remove the single greatest barrier to housing affordability – stamp duty.”
Mr Collins added that the state of the WA property market is “all too familiar tale for Western Australians” with a need to bring in reforms in order to turn around the local market and economy.
“REIWA is disappointed the McGowan government have doubled down on their 7 per cent foreign owner duty surcharge (FODS) in this budget, despite the new tax having negatively affected building and off-the-plan sales since it was implemented in January 2019 and raised less than 10 per cent of the last year’s estimations,” he said.
“In the 2018-19 budget, the WA government forecast the FODS would bring in $123 million worth of revenue for the state over three and a half years, but in the first five months, a measly $2 million has been raised, with another $1.8 million yet to be collected. All that this new tax has accomplished is further stifling WA’s struggling property market.”
There is a potential for assistance in the future, however, as Mr Collins said the Treasurer told industry groups that a stamp duty concession for seniors was being considered by the government to be implemented when the WA economy improves.
“REIWA is very hopeful that the concession for seniors will be included in the next state budget. Our industry has been crying out for an initiative to kickstart transactions and giving seniors a helping hand will have positive ramifications for everyone as it frees up valuable housing stock for young families,” Mr Collins said.
“While the recent changes to the Keystart lending eligibility will help a small number of home buyers, it is still tinkering at the edges, when a more substantive policy is needed to get the property market back on track.”
REIWA continues to call on the WA government to implement real, long-lasting change that will benefit every Western Australian, 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.
In its pre-budget submission, REIWA focused on six main features for the WA state government to focus on, which were:
1. No increases to transfer duty and no changes to thresholds
2. Reintroduce the $7,000 First Home Owner Grant for existing dwellings
3. Introduce a $10,000 concession on stamp duty for seniors over 65
4. No changes to rates or thresholds of land tax
5. Remove the Foreign Owner Duty Surcharge
6. Review the viability of a move to a broad-based land tax system to remove transfer duty
The REIWA and Mr Collins congratulated the WA government on returning to surplus and were pleased that property taxes were not raised.
Budget is defined as the estimation of expenses made over a specified time for the purchase of goods or services.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.