A Western Australia real estate body has unveiled what it dubs a “plan for prosperity”, which aims to lead to a market recovery post-COVID-19.
The Real Estate Institute of Western Australia (REIWA) has outlined a series of recommendations that it says will help boost the economy and enable more people to enter the property market.
The first recommendation is a call to reform stamp duty. The REIWA has called on the WA government to commit to a full state tax review and feasibility study of a two-stream revenue collection approach to stamp duty.
“A two-stream approach would allow buyers to decide whether to pay the stamp duty upfront, or whether to opt in for an annual fee for the duration of ownership, with the reduction in upfront costs encouraging more transactions with a significant flow-on effect to economic activity,” REIWA president Damian Collins said.
“Introduce a $10,000 stamp duty concession for seniors over the age of 65 to encourage appropriate ‘rightsizing’.
“Not only is stamp duty a hindrance to affordability, it limits household’s ability to make appropriate housing decisions in accordance with their lifestyle choices, changing needs or economic reasons.
“In order to ensure WA has the right mix of housing options and diversity to meet the changing needs of the community, REIWA recommends that seniors’ households should be given the opportunity to rightsize and free up their existing housing by obtaining a concession on stamp duty costs for their next home,” Mr Collins said.
In a similar vein, Mr Collins noted that the REIWA is calling on government to formalise the stamp duty rebates for off-the-plan-purchases.
“The current 75 per cent stamp duty rebate for buyers of off-the-plan and under construction apartments has been vital in ensuring an ongoing pipeline of projects, which in turn ensures a steady supply of diverse housing and jobs for Western Australians,” he said.
“If a person bought an off-the-plan apartment prior to the rebate, they paid stamp duty on the combined value of the land and the build, compared to a house-and-land package that is taxed solely on the value of the land.”
The removal of stamp duty on the purchase of small businesses is another recommendation laid out by the body, who noted that WA “is one of three states or territories that continues to collect stamp duty on a business purchase”.
“If stamp duty was abolished for the purchase of a small business, the potential saving could go towards employing five staff members on a full-time basis or 10 apprentices,” Mr Collins said.
“With businesses facing even bigger challenges due to the impacts of COVID-19, we need to be encouraging people to buy small businesses, which will create much-needed jobs, generate additional spending, as well as giving a helping hand to those who need to sell.”
Finally, the REIWA is calling for the government to reintroduce the $7,000 First Home Owner Grant for the purchase of existing dwellings.
Mr Collins noted that in 2019, the number of first home buyers reached its lowest levels since 2011 at just 13,653 and of those, 8,285 were for established properties and 5,368 were new homes.
“Allowing first home owners access to the $7,000 grant for established homes could increase their purchasing power and encourage more buyers, resulting in more stamp duty from the trade-up market,” he said.