The Real Estate Institute of Western Australia (REIWA) is calling for the state government to make the Off-the-Plan Duty Rebate Scheme permanent.
Under the scheme, which was introduced in 2019, buyers are entitled to a 75% rebate for stamp duty or foreign buyers duty paid on pre-construction contracts, capped at a maximum of $50,000.
The scheme was originally set to expire on 23 October 2021 but was extended by the state government for two years. Along with the extension is the change in the rebate rate to 50%.
REIWA president Damian Collins said the rebate was a significant help to the off-the-plan market, removing the “unfair financial burden” placed on buyers.
“Prior to the rebate, when an off-the-plan apartment was purchased, the buyer paid stamp duty on the combined value of the land and build, however a house and land package is taxed solely on the value of the land,” he said.
“It has also been very effective at promoting infill and creating construction jobs.”
Mr Collins said removing the rebate will only add to urban sprawl, as it will encourage home seekers to look elsewhere.
“The rebate scheme is currently countering this issue, but if it is removed next year as planned, apartment buyers will once again be significantly disadvantaged.
“The removal of this scheme would halt the progress we’ve observed, softening the demand for apartments, impacting the steady supply of diverse housing and reducing the creation of construction jobs in the state over the medium-to-long term.”
According to REIWA, sales activity in Perth slowed down over the week ending in Easter Break, down by 10%.
The 30% decline in unit sales was the main driver of the overall dip in sales over the past week.
Property listings also declined, down by 2%. Listings for houses and units fell over the week, while land listings increased by 1%.
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Photo by @nathan_hurst on Unsplash
