Why stamp duty should be a priority in the WA Election

REIWA recently undertook a survey to better understand the public’s attitude towards stamp duty. Find out what the people of WA had to say.

REIWA President Damian Collins

With stamp duty one of the biggest imposts to home ownership, REIWA recently undertook a survey to better understand the public's attitude towards the tax.

The survey, which received more than 1,000 responses, found that 91 per cent of respondents agreed stamp duty in its current form is a significant barrier to home ownership. The results were emphatic and reinforced REIWA's position that stamp duty needs to be urgently reformed in Western Australia.

Most West Aussies would prefer an annual tax

Respondents were also asked if they would they prefer to pay stamp duty upfront or as an ongoing annual fee. Fifty-nine per cent indicated they would choose to pay the tax as a smaller annual fee, while only 41 per cent said they would pay stamp duty upfront in its current form.

The age group most likely to utilise the annual fee are seniors over the age of 71, with 62 per cent stating they would choose the annual fee, whereas 57 per cent of 18-25s would rather pay the amount upfront. This is because many in this age group would be first home buyers and would pay no stamp duty or pay a concessional rate on the purchase of their first property.

As it stands, most home buyers utilise savings or borrow the funds to cover the cost of stamp duty. Either option significantly impacts the buyer financially, as it typically increases the value of the initial loan, accruing interest over many decades.

The potential financial benefits were the most important aspects of the proposed reforms to stamp duty for respondents with 41 per cent believing a smaller home loan as a key benefit. The ability to move more often (38 per cent) and less need for lender's mortgage insurance (26 per cent) were also key benefits noted by respondents.

If other states can do it, so can WA

The two-stream approach is in line with New South Wales, who at the end of last year, committed to introducing a two-stream revenue collection method for stamp duty. They will begin the process of strategic stamp duty reform this year with the goal of initiating the new payment structure in the next two years.

Ahead of the WA Election in March 2021, 56 per cent of respondents said a promise to reform stamp duty would impact their voting decision. Therefore, REIWA is calling for all parties to commit to changing the way stamp duty is paid by allowing the buyer to choose for themselves whether to pay the amount upfront or as an ongoing annual fee.