Targeted stamp duty reform needed to ease WA housing market pressure

17 March 2022

"WA has one of the strongest economies in the world, which is why REIWA is calling for stamp duty relief to be provided for seniors, first home buyers, off-the-plan purchases and small businesses."

Western Australia has one of the strongest economies in the world, which is why it is time stamp duty relief is provided for seniors, first home buyers, off-the-plan purchases and small businesses.

REIWA President Damian Collins said whilst the Premier has made it clear he had no intention of introducing major stamp duty reform during a pandemic, introducing smaller targeted reforms would help relieve pressure on the WA housing market.

“REIWA believes WA is in a prime position to deliver bold housing reform now, however we do appreciate that these are uncertain times.

“The pandemic is not an excuse to take tax reform off the table altogether though. There are smaller, more practical reforms that if implemented would target stamp duty without requiring a major upheaval of the state’s taxation system,” Mr Collins said.

In its 2022-23 pre-budget submission, REIWA is calling on the WA Government to introduce four targeted reforms to help first home buyers and seniors and make it easier to purchase off-the-plan properties and small businesses.

“These reforms would pose minimal risk for the WA Government, deliver significant benefits to the economy and housing market, and ease the unfair financial burden placed on everyday West Aussies by these inefficient taxes,” Mr Collins said.

1. Introduce a one-off, $10,000 residential stamp duty concession for those aged 65 and over.

REIWA is calling for the WA Government to help seniors by introducing a one-time, $10,000 residential stamp duty concession for people aged 65 and over.

Mr Collins said stamp duty was a major deterrent for seniors wishing to right-size into more suitable accommodation, with many either struggling to raise the upfront costs or reluctant to dip into their hard-earned retirement savings to fund the move.

"Stamp duty concessions for seniors is not a radical idea. Victoria, Tasmania, Australian Capital Territory and Northern Territory all offer seniors stamp duty concessions, there is no reason WA can’t do the same.

“Introducing a one-off, $10,000 stamp duty concessions for seniors would ease the burden of these upfront costs and help people aged over 65 right-size into more suitable accommodation. This would free up housing stock and assist with mobility across the entire market," Mr Collins said.

2. Lock in the Off-the-Plan Duty Rebate Scheme permanently.

REIWA is calling on the WA Government to lock in the Off-the-Plan Duty Rebate Scheme permanently.

The Off-the-Plan Duty Rebate Scheme was introduced in 2019 to incentivise development of multi-unit dwellings by removing the unfair financial burden placed on buyers looking to purchase off-the-plan apartments.

Originally set to expire on 23 October 2021, the scheme was last year extended until 24 October 2023.

“We were pleased the WA Government decided to extend the scheme in its 2021-22 Budget, but now it is time to make this a permanent fixture of the WA taxation system,” Mr Collins said.

“If this scheme is removed, the demand for apartments will soften, which will impact the steady supply of diverse housing and reduce the creation of construction jobs in the state in the medium to longer term.

“The Off-the-Plan Duty Rebate Scheme has been very effective in promoting infill and is precisely the policy measure that our property market needs to reduce urban sprawl.”

3. Remove stamp duty on the sale of small business assets.

REIWA is calling for the WA Government to remove stamp duty from the sale of small businesses.

Mr Collins said it was disappointing that WA was one of the only places in the country that still imposed stamp duty taxes on small businesses.

“Victoria, New South Wales, Tasmanian, South Australia and the Australian Capital Territory have all removed stamp duty from small business sales, it is high time WA did too.

“We are creating a business environment that is less competitive than the eastern states and placing a cost burden on small businesses which discourages productivity and the entrepreneurial spirit.

“Small businesses need support now more than ever as WA adjusts to living with COVID-19. It is essential that the WA Government remove this obstacle and implement policies that boost productivity,” Mr Collins said.

4. Increase the threshold of concessional rate of stamp duty for first home buyers.

REIWA is calling for the WA Government to lift the First Home Owner Rate of Duty (FHOR) duty-free thresholds from $430,000 to $530,000, with the concessional rate threshold lifted accordingly.

“It is important that the WA market remains accessible for first home buyers. We need to ensure that the duty-free thresholds and concessional rates for first home buyers is reflective of where the market is at," Mr Collins said.

“We have seen strong price growth across the state over the last 18 months, so it is time to adjust the thresholds to ensure the dream of home ownership remains achievable for West Australians.”