• WA Budget

    WA Budget 2019-20

    The 2019-20 WA Budget was handed down on Thursday 9 May and REIWA congratulates the McGowan Government on returning the WA Budget to surplus.

    Overall, we are pleased that the McGowan Government resisted temptations to increase property taxes, however we remain disappointed that once again there were few initiatives included in this budget to help address housing affordability and aid the property sector in its recovery.     

    As part of its pre-budget submission, REIWA called for six key policy recommendations to help aid a fair, sustainable and prosperous local property market.  Unfortunately, the bulk of the Institute's recommendations were overlooked. 

    REIWA's budget response

    1. REIWA strongly recommends that the WA Government does not increase transfer duty rates or change thresholds.

    REIWA congratulates the WA Government on its decision to not increase transfer duty rates or change thresholds.

    At a time when the established residential market is soft, it’s encouraging that the WA Government has listened to warnings and not meddled with transfer duty rates as a means for improving the budget position.

    The WA residential market is showing early signs of stabilisation. Any upward adjustments to transfer duty rates would only halt the early signs of confidence and instead cause further adverse effects in the market.

    This outcome shows the WA Government’s commitment to not burdening the property market with onerous taxation.

    2. REIWA strongly recommends that the WA Government maintains the existing transfer duty exemption for first home buyers at $430,000, and re-introduce a $7,000 FHOG for the purchase of existing dwellings.

    While we are pleased the WA Government has maintained the transfer duty exemption for first home buyers, it’s disappointing that first home buyers who choose to buy established properties are still being penalised.

    There is a clear preference for established properties, likely due to the proximity to established infrastructure and amenity. The WA Government should embrace the preference of first home buyers by re-introducing a first home owner grant for the purchase of established property, as it reduces the financial burden on the Government to provide essential services to new dwellings on the outer fringes.

    3. REIWA recommends that the WA Government introduces a $10,000 concession on stamp duty for seniors over the age of 65 to encourage appropriate ‘right-sizing’.

    It is disappointing that the WA Government neglected to introduce a stamp duty concession for seniors over 65.

    Stamp duty creates a significant barrier for seniors on fixed incomes who are looking to change their lifestyle or downsize and we are disappointed the Government has not taken steps to ease this pressure for the elderly in our community.

    However, there was a glimmer of hope as the Treasurer told industry groups that a stamp duty concession for seniors was on the Government’s radar and would be considered as WA’s economy improves. We are very hopeful that the concession for seniors will be included in the next state budget.

    4. REIWA recommends that the WA Government makes no further changes to rates or thresholds for land tax.

    REIWA is pleased the Government did not consider increasing property taxes for West Australians , recognising the negative impact land tax increases in previous budgets has had on hard working West Aussies.

    We will continue to work with the McGowan Government to ensure a sustainable rental market across WA.

    5. REIWA recommends the WA Government revoke the Foreign Owner Duty Surcharge to keep WA property competitive.

    REIWA is disappointed the McGowan Government have doubled down on their seven per cent Foreign Owner Duty Surcharge (FODS) in this budget, despite the new tax having negatively affected building and off-the-plan sales since it was implemented in January 2019 and raised less than 10 per cent of the last year’s estimations.

    In the 2018-19 Budget, the WA Government forecast the FODS would bring in $123 million worth of revenue for the state over three and a half years, but in the first five months a measly $2 million has been raised, with another $1.8 million yet to be collected. All that this new tax has accomplished is further stifling WA’s struggling property market.

    6. REIWA recommends that the WA Government undertakes a state tax review. This review must assess the viability of and financial implications on the community of a shift to a broad-based land tax system that ultimately removes transfer duty.

    REIWA is disappointed that once again the WA Government has ignored calls to commit to a state tax review.

    A state tax review would have enabled the Government to seriously look at ways of ensuring future revenue streams are more sustainable, while the removal of transfer duty would help improve housing affordability and mobility.

    Whilst we understand that reform at a state level may be more difficult to achieve without reform at a federal level, it is still disappointing that once again the WA Government has shaken off tax reform as a priority, especially given the additional funds now available from the greater share of GST WA now receives.

    View REIWA's official response.

    For more information, contact REIWA Advocacy & Policy Manager Sadie Davidson at [email protected].