Reiwa launches plan to boost WA property industry

Reiwa launches plan to boost WA property industry

REIWA is calling on the State Government to take action to kick-start the ailing WA housing market.

Property sales were less than 39,000 in 2018 compared to 89,000 in 2005 – a clear sign the industry needs a stimulus to attract buyers and investors, according to the institute.

Launching a six-point plan, Reiwa president Damian Collins said the market was an integral part of the WA economy that provided a regular source of income for the state.

“Reiwa’s six-point plan outlines recommendations that we believe will help boost the economy and enable more people to enter the property market,” he said.

If endorsed, the plan would benefit first-time buyers and seniors, help attract investment in WA and incentivise off-the-plan purchases to create jobs, and introduce a “fair” property tax system.

Reiwa’s recommendations are:

Increase the stamp duty exempt threshold for first-home buyers to $550,000

“With first home buyers accounting for a third of all residential property transactions in WA, the stamp duty exception limit should be increased from $430,000 to $550,000,” Mr Collins said.

“This will open up 49 per cent of properties in the Perth central sub region (within 15km of the CBD).

“Enabling first-home buyers to purchase established properties provides the opportunity to live closer to the city and also has major economic flow-on effects, with buyers often then spending a significant amount on renovations.”

Re-introduce the $7000 FHOG for the purchase of existing dwellings

In 2018, the number of first-home buyers reached its lowest levels since 2011, with 8511 purchasing established properties and 6246 buying new homes, according to Reiwa.

“By re-introducing the $7000 First Home Owner Grant for the purchase of existing dwellings, all West Australians will get a helping hand into their first home, regardless of what they choose to buy,” Mr Collins said.

Introduce a $10,000 concession on stamp duty for seniors over the age of 65 to encourage appropriate “right sizing”

Stamp duty is a hindrance on affordability and limits households in making appropriate housing decisions in accordance with their lifestyle choices, changing needs or economic reasons, according to the institute.

“To help seniors over the age of 65 to be able to ‘right size’ their properties, Reiwa is asking the State Government to introduce a $10,000 concession which will open up housing diversity options for all potential home buyers,” Mr Collins said.

Remove the stamp duty penalty for off-the-plan purchases

“In addition, REIWA calls for an off-the-plan concession to allow stamp duty to only be payable on the land component alone, which brings it in line with current house and land purchases, reduces urban sprawl and promotes infill developments,” Mr Collins said.

Revoke the foreign owner duty surcharge to keep WA property competitive

The WA property market attracts the lowest number of foreign investors of any state and is second only to the Northern Territory nationally, according to Reiwa.

“Foreign investors play a key role in the delivery of off-the-plan projects which creates construction jobs for thousands of West Aussies, which is why REIWA recommends that the seven per cent foreign owner duty surcharge be revoked to keep the WA property market competitive,” Mr Collins said.

Recommendation for a state tax review

“Reiwa’s outlook for 2019 indicates the market will remain soft well into 2020, which is why Reiwa is asking for the State Government to undertake a state tax review,” Mr Collins said.

“It is important to our economy that the government assesses the viability and financial implications of shifting to a broad-based land tax system that ultimately removes stamp duty.

“Reiwa will continue to advocate for a fair property tax system so that every West Australian has the opportunity to reach their home ownership aspirations.”

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