With buyers citing stamp duty as a major barrier to home ownership, experts are calling for collection methods to be amended to ease the burden on home buyers.
The Real Estate Institute of Western Australia (REIWA) has called for every political candidate to commit to a two-stream revenue collection method for stamp duty ahead of the state election.
According to REIWA, the two-stream revenue collection method would provide home buyers an option to either pay the tax upfront, as is currently mandatory, or to opt for an ongoing annual payment.
REIWA president Damian Collins opined that this method would ultimately allow more people to enter the housing market by removing a significant financial burden.
“Stamp duty is a huge impost on buyers, adding a considerable amount of money to the savings required to qualify for a home loan, as well as thousands of extra dollars over the life of the loan.
“This additional cost is too big of a burden for many buyers, pushing their dream of home ownership out of reach,” the president said.
With dual options for payment, Mr Collins said the local government could create “a more equitable” taxation system.
Across the country, NSW committed to a two-stream revenue collection method last year, with the intention to roll it out over the next couple of years.
But experts have forecast a complete removal of stamp duty, in favour of an annual tax.
REIWA cited a recent analysis by the NSW Treasury Department, which found that the annual volume of housing transactions could increase by 50 per cent if stamp duty was removed and an annual tax was put in place.
A recent survey by the institute also showed that, along with the 90 per cent who considered stamp duty a significant barrier to home ownership, 60 per cent said that they would opt for an annual fee if given the choice.
“It’s clear that reforming stamp duty would create positive outcomes for both buyers and government. REIWA has been calling on the WA government to reform stamp duty in WA for years.
“Now that other states are taking action to lessen the financial burden of stamp duty, we need to act quickly to ensure WA remains a desirable option for home buyers.
“It’s time all political parties committed to reforming stamp duty to help deliver a fair, sustainable and prosperous property market for Western Australians,” Mr Collins concluded.