The Real Estate Institute of Western Australia has launched a six-point plan to attract buyers and investors back to the market following a dramatic decline in sales activity.
The plan includes changes to stamp duty, reintroducing first home owner grants, and revoking the foreign owner duty surcharge.
“REIWA’s six-point plan outlines recommendations that we believe will help boost the economy and enable more people to enter the property market,” Mr Collins said.
1. Increase the stamp duty exempt threshold for first home buyers to $550,000
With first home buyers accounting for a third of all residential property transactions in WA, Mr Collins said the stamp duty exception limit should be increased from $430,000 to $550,000, opening up 49 per cent of properties in the Perth central sub region (within 15 kilometres of the CBD).
“Enabling first home buyers to purchase established properties provides the opportunity to live closer to the city and also has major economic flow-on effects with buyers often then spending a significant amount on renovations,” Mr Collins said.
2. Reintroduce the $7,000 FHOG for the purchase of existing dwellings
In 2018, the number of first home buyers reached its lowest levels since 2011, with 8,511 purchasing established properties and 6,246 purchased new homes.
“By re-introducing the $7,000 first home owner’s grant for the purchase of existing dwellings, all West Australians will get a helping hand into their first home, regardless of what they choose to buy,” Mr Collins said.
3. Introduce a $10,000 concession on stamp duty for seniors to encourage appropriate ‘right-sizing’
Not only is stamp duty a hindrance on affordability, it limits households in making appropriate housing decisions in accordance with their lifestyle choices, changing needs or economic reasons.
“To help seniors over the age of 65 to be able to ‘right size’ their properties, REIWA is asking the State Government to introduce a $10,000 concession which will open up housing diversity options for all potential home buyers,” Mr Collins said.
4. Remove the stamp duty penalty for off-the-plan purchases
REIWA is calling for an off-the-plan concession to allow stamp duty to only be payable on the land component alone, which brings it in line with current house and land purchases, reduces urban sprawl and promotes infill developments.
5. Revoke the foreign owner duty surcharge
Currently the WA property market attracts the lowest number of foreign investors of any state.
“Foreign investors play a key role in the delivery of off-the-plan projects which creates construction jobs for thousands of West Aussies, which is why REIWA recommends that the seven per cent foreign owner duty surcharge be revoked to keep the WA property market competitive,” Mr Collins said.
6. A state tax review
Mr Collins said the REIWA’s outlook for 2019 indicates the market will remain soft well into 2020, which is why REIWA is asking for the State Government to undertake a state tax review.
“It is important to our economy that the government assesses the viability and financial implications of shifting to a broad-based land tax system that ultimately removes stamp duty,” he said.