REIWA asks State Government to reform property taxes, improve affordability

REIWA asks State Government to reform property taxes, improve affordability

REIWA says the State Government should not rely on the property industry to prop up state finances in this year’s budget following another disappointing GST allocation.

President Hayden Groves said while the institute understood the government was facing another difficult budget, burdening West Australians with unfair taxes as a means of budget repair would do little to ease the state’s fiscal pressures.

“The property market has been weak for some time,” he said.

“We are beginning to see some green shoots of recovery, but increasing taxes could jeopardise WA’s economic bounce back.”

Mr Groves said access to affordable and appropriate housing was still one of the more challenging issues facing West Australians.

“Whether it be first-home owners finding their feet in the market or seniors looking to right-size into more manageable accommodation, the WA budget should outline key reforms to open doors for those that need it most,” he said.

Mr Groves cited land tax, which increased several times in recent years, as an example, saying WA already had one of the highest rates of land tax in the country.

“Any further increases would deter much needed investment, driving up rent prices and pricing the most vulnerable out of the rental market,” he said.

In its pre-budget submission, REIWA called on the State Government to introduce measures that would improve housing affordability for all West Australians including;

– Re-introduce the First Home Owner Grant of $3000 for buyers of established home less than $430,000.

– Introduce a transfer duty concession for seniors “right-sizing”.

– Commit to no increases in property taxes, or changes to thresholds to either transfer duty or land tax.

Last year’s budget saw the government leave existing property taxes unchanged, but announce a 4 per cent foreign owner duty surcharge on purchases of residential property by foreign individuals and entities.

It is due to come into effect on January 1, 2019 and at the time of the announcement was expected to create $49 million in revenue by 2020-21.

REIWA is also calling for this to be revoked or deferred, stating in its submission that the WA property market attracted a low number of foreign investors and the introduction of the surcharge would deter much needed investment in the state while doing nothing to make housing more affordable for West Australians, a common reasoning behind the introduction of such a surcharge.

Instead of year-to-year changes, REIWA has asked the government to commit to long-term tax reform.

“Safe and suitable housing is intrinsic to the success of local communities and the WA Government should be doing everything it can to ensure access to home ownership is a reality for everyone,” Mr Groves said.

“Now is not the time to be burdening property with additional taxes.

“In the long term, a complete tax review is needed to ensure taxes are being utilised as efficiently as possible.

“REIWA recommends a report into phasing out transfer duty in favour of a broader-based land tax.”

Read REIWA’s pre-budget submission here

MORE: Perth property market remains stable

MORE: Preventing disputes between landlords and tenants

MORE: Perth’s 10 fastest selling suburbs