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  • Transfer duty concessions for off-the-plan apartments required to improve affordability and housing diversity

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    A recent REIWA survey of WA property seekers found 64 per cent of respondents would be more likely to buy or invest in off-the-plan apartments if transfer duty rates were amended to be more in line with house and land packages.

    REIWA President Hayden Groves said current transfer duty rules around off-the-plan purchases distort the WA property market by favouring house and land packages.

    “Apartments sold off-the-plan are liable for transfer duty on the full sale price of both the land and apartment, whereas house and land packages are typically only charged transfer duty on the land component.

    “Not only does this create a disincentive for buying an apartment, it places an unfair financial burden on those buyers who do choose to purchase off-the-plan,” Mr Groves said.

    Affordability a concern for WA property seekers

    In addition, the survey also found 62 per cent of respondents considered affordability the biggest housing issue for our changing population.

    “As Western Australia grows and the population demographics of our state change, we are going to need more diverse housing solutions to better suit the needs of our community,” Mr Groves said.

    “Incentivising off-the-plan apartment sales by aligning transfer duty rates with house and land packages will help improve affordability for West Australians seeking alternative housing options and re-balance the available stock by adding more diversity to the market. At present, 80 per cent of all housing stock in WA is standalone houses, which needs to change.”

    REIWA scenario analysis

    REIWA scenario analysis shows at current rates, the transfer duty fee applicable to a house and land package of $564,500 would be $7,315. By contrast, the transfer duty fee for an apartment of the same value would be $21,170.75.

    “That’s a difference of more than $13,000 and a huge disincentive for prospective buyers and investors considering off-the-plan apartments,” Mr Groves said.

    The analysis found if a 50 per cent concession on transfer duty for off-the-plan apartment purchases were to be applied, there would be a short term loss for the state of up to $12.3 million. However, ultimately, it could generate a net growth of up to $9.2 million for the state if sales increased by seven per cent.

    “Even at a more conservative five per cent growth in apartment sales, this would still generate $3.1 million for the Government,” Mr Groves said.

    “We are calling on all political parties to commit to improving housing affordability and diversity in WA, by creating an even playing field for buyers and investors wishing to purchase off-the-plan apartments.”

    REIWA State Election campaign survey three infographic

    REIWA State Election Survey Results Infographic|Transfer duty concessions for off-the-plan transactions

    For more information about REIWA's State Election campaign, view the Advocacy page.