The Real Estate Institute of Western Australia (REIWA) has urged the WA government and the Opposition to take more action on stamp duty.
Annual property sales in WA have dropped from over 71,000 in 2013 to less than 41,000 in 2018. Stamp duty has significantly impacted sales, as the tax costs buyers thousands of dollars on their home purchase, according to REIWA President Damian Collins.
“Instead of a large upfront tax bill that requires additional borrowing for many people, an option could be for home owners to pay a much smaller annual fee based on the unchanged property value of their land, which would be spread across many years, creating a steady stream of reliable income for state and territory governments,” Collins said.
In the current system, a $50,000 deposit for a home at the current median price of $495,000 would incur $17,765 in stamp duty. Factoring in the lenders mortgage insurance cost of $16,010, a buyer would need to take out a larger mortgage worth almost 95% of the property value to cover the costs.
“By moving towards a land-based tax regime, there would be a number of flow-on benefits, including providing the government with more income to reinject into the economy. It would allow for greater housing mobility across the community. Households could locate closer to employment and activity centres, thus reducing congestion,” Collins said.
