THE increase to Keystart income levels, infrastructure initiatives and no changes to property taxes were welcomed by the property industry in yesterday’s State Budget announcements, but other aspects were given further scrutiny.
UDIA WA chief executive Tanya Steinbeck said the state government’s revenue, via property taxes in particular, would be boosted considerably if the property market recovery was further supported.
“The budget papers on one hand, recognise the decreased revenues that have resulted from ongoing weaker property market conditions and on the other hand, make predictions in the forward estimates about projected increases in revenue that are expected to come from sources such as transfer duty,” she said.
“Unless we see more support for the recovery, the government will not see an increase in revenue from these sources.”
Reiwa president Damian Collins was pleased the government has resisted the temptation to increase property taxes, but said the allocation of the budget was mostly uninspired.
“Treasurer Ben Wyatt has considerably revised the state’s economic position due to WA’s increased share of the GST and the surge in commodity prices,” he said.
“This influx of funds should go towards reducing state taxes, particularly stamp duty, and helping first-home buyers get into the market through the reintroduction of the First Home Owners Grant for established properties.
“With the coffers fuller than we could have imagined just a few years ago, now is the time for the WA Government to step up and lead not only the state but the country and remove the single greatest barrier to housing affordability, stamp duty.”
Both Reiwa and UDIA WA would particularly like to see a stamp duty concession introduced for seniors looking to downsize into more liveable homes.
“As well as ensuring that seniors live in homes suitable to their needs, broader government revenues would benefit from a concession on stamp duty given the greater market activity it would generate,” Ms Steinbeck said.
Mr Collins said 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.
“Our industry has been crying out for an initiative to kick-start transactions and giving seniors a helping hand will have positive ramifications for everyone as it frees up valuable housing stock for young families,” he said.
Master Builders executive director John Gelavis hoped there would be an increase of confidence in the building sector, following the announcement of a budget surplus .
“The industry has lost around 15,000 workers during the downturn and a significant number of building companies have gone under; many more are clinging to survival,” he said.
“It is important to protect the building industry from devastation or it won’t have the capacity to build the new homes, roads, hospitals and other infrastructure which will be in demand as the state returns to better times.”
Foreign Buyer Surcharge
The Foreign Buyer Surcharge was criticised by industry bodies when it was introduced and was in the firing line again.
“The Property Council would like to have seen some more transparency from the State Government on just how much revenue it has received from the surcharge and whether or not it is living up to expectations,” executive director Sandra Brewer said.
“Developers have indicated that the surcharge has had serious negative impact on sales, which is a risk to tax revenue and jobs.”
UDIA WA believed the surcharge was not providing the government with as much revenue as was initially predicted in last year’s budget papers.
“Last year the Treasurer was very enthusiastic about the prospect of about $120 million in expected revenue over four years resulting from the surcharge,” Ms Steinbeck said.
“This year, the surcharge revenue figures are hard to judge given they are buried in the broader Transfer Duty line items.
“I just don’t see how that target will be reached given the decline in foreign investment we are experiencing, when attracting foreign investment free of surcharges could have been a unique selling proposition and drive further investment for Perth.”
Mr Collins said the tax had negatively affected building and off-the-plan sales since it was implemented and raised less that 10 per cent of last year’s estimates.
“In the 2018-19 Budget, the WA Government forecast the (surcharge) 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,” he said
“All that this new tax has accomplished is further stifling WA’s struggling property market.”
Metronet and infrastructure
In general Metronet initiatives and investment in metropolitan and regional infrastructure were welcomed, particularly in terms of job creation.
Mr Gelavis said there had been a lot of talk about Metronet.
“Let’s get it built,” he said.
Ms Steinbeck said it was encouraging to see construction would start on the Thornlie-Cockburn and Yanchep raid lines this year.
An Employee Incentive Scheme would provide $282 million for employers who were not eligible for the Construction Training Fund.
Mr Gelavis said this would create opportunities for apprentices and trainees.
HIA executive director Cath Hart was pleased the government had acknowledged how hard it could be to employ an apprentice in the current market.
“Employers in the construction industry using a Group Training Organisation (GTO) to employ an apprentice will receive a grant of $2,125 per year of employment, a welcome incentive that will see more people in training,” she said.
“Many small businesses in the construction industry will now have access to reduced cost, flexible employment options for apprentices.
“Apprentices are the future of the home building and construction industries and GTOs provide specialised services that can support apprentices through to completion and on to a successful career in the building industry.”