With stamp duty on residential homes blowing out by 31% in the last financial year, the Real Estate Institute of Australia (REIA) has called on government to make changes.
Rob Druitt, president, Real Estate Institute of Western Australia (REIWA), wants WA’s stamp duty rates – among the most expensive in the country – to be reined in.
“Treasury has consistently failed to accurately estimate the level of tax revenue it would receive from the current high levels of economic growth,” he said, adding that the result of this is an overshoot in estimated receipts of conveyance duty “by an average of more than 40% each year for the last five years”.
Instead of receiving $6bn in revenue from stamp duty on conveyances for the financial year of 2003/04 through to today, Treasury now estimates that receipts will top $8.5bn for this period, Druitt said.
Meanwhile, WA homeowners upgrading to a new property of around $500,000 are paying stamp duty of nearly $21,000.
“In Brisbane stamp duty on the same priced house is only half that much, while even Sydney’s stamp duty on such a home is $3,000 cheaper than in Perth,” he added.
“The government’s own mid-year review clearly shows that it’s affordable for the Treasurer to look at real reform of conveyance duty thresholds which haven’t been adjusted since 1983.
“With house prices having grown so dramatically over the last five years, the old scale of stamp duty is completely out of kilter with current prices. The government must address the exceptional bracket creep in stamp duty that has resulted from a strong market trapped in a 25-year-old tax scale.”
REIWA recommends a package of property tax reforms costing around $400m. Druitt added that the Institute’s proposal is fiscally responsible and represents a return to property buyers for the over-taxation which has prevailed for the last five years.
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