The Real Estate Institute of Western Australia (REIWA) has proposed four ways for the state government to reform stamp duty in order to mitigate its negative effects on the real estate market.
REIWA President Damian Collins said stamp duty has once served as a "hand brake" on the economy, although it is becoming a major source of revenue for WA.
"The stamp duty actively discourages homeownership and makes it much more difficult for people to travel frequently," Collins said.
“Our state's finances are enviable. We have overcome the challenges of COVID-19 relatively unscathed and are one of the only economies in the world to thrive right now. "
REIWA's 2021-22 pre-budget submission introduced four "bold reforms" to stamp duty to help ease the pressure it places on housing affordability.
Two-stream revenue collection method
Mr. Collins stated that the stamp duty, in its current form, is a huge problem for buyers in the state.
"The stamp duty adds a considerable amount to the savings needed to buy a house, as well as the debt incurred by buyers, which adds thousands of dollars more over the life of the loan", a- he declared.
"This additional cost is too heavy a burden for many buyers, making their dream of home ownership beyond reach. "
The proposal is to introduce a two-tier collection model for stamp duty that would offer buyers the option of paying an initial or ongoing annual royalty.
A REIWA survey released last year found that three in five homebuyers would opt for an ongoing annual stamp duty fee if they had the choice.
"Reforming the stamp duty by implementing a two-stream revenue collection method would remove one of the biggest financial hurdles buyers face and lead to a significant increase in the productivity of our economy" said Collins.
$ 10,000 in Relief for Elderly Buyers
Another proposal is to provide a stamp duty of $ 10,000 for buyers over the age of 65.
Mr. Collins believes that the stamp duty prevents many senior buyers from choosing more suitable housing.
He stated that this proposal will have an indirect effect on the supply of housing.
"Targeted stamp duty relief for the elderly would contribute to these upfront costs and help them adjust to the appropriate size in more suitable housing, freeing up housing stock and facilitating mobility. across the market. "
Discount for off-plan purchases
In 2019, the state government implemented stamp duty rebates for off-plan apartment buyers in an attempt to boost construction activity and alleviate some of the costs of purchasing an off-plan unit.
However, this discount will expire in October.
REIWA proposes that this be an ongoing program to help encourage the purchase of collective housing.
"The current 75% stamp duty rebate for off-plan apartments has been critical to ensuring a continuous pipeline of projects," Collins said.
“We believe that without this continued incentive the demand for apartments will decline, impacting the continued supply of diverse housing and job creation for Australians in Australia. 39; West. "
Abolition of stamp duty on the business
REIWA urges state to join Victoria, New South Wales, Tasmania, South Australia and Australian Capital Territory in removing stamp duty for the purchase of small businesses.
Mr Collins said this was crucial as small businesses were hit the hardest amid lockdowns and restrictions.
He thinks that removing this tax would support businesses and improve their productivity.
"As one of the only places in the country to still levy stamp duty on business assets, we are creating a less competitive business environment than the eastern states and imposing a financial burden small businesses, which discourages productivity and entrepreneurship. spirit, ”he said.
“With more people changing careers than ever before, we need to pave the way for those who want to try their luck. "
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