In the efforts to breathe new life to the state's struggling property market, the Western Australian government has unveiled stamp-duty rebates available to buyers of off-the-plan apartments.
Property buyers who sign a pre-construction contract to purchase a new apartment for the next two years are eligible for as much as a 75% stamp-duty discount. The discount will also be applied to foreign property surcharge.
Read more: Study Flags Impact Of "Absurdly High" Stamp Duty
This change means buyers targeting a $400,000 apartment will only pay around $3,200 in stamp duty, allowing a savings of over $9,700.
First-home buyers can take advantage of the rebate in addition to the already existing assistance package. This means that for an apartment valued at $450,000, first-home buyers will only be paying $960 in stamp duty.
The tables below show how much savings general buyers and first-home buyers can get under the rebate program.
Impact of stamp duty rebates to general buyers |
|||
Price ($) |
Current duty |
New duty |
Savings |
|
300,000 |
8,835 |
2,209 |
6,626 |
|
400,000 |
13,015 |
3,254 |
9,761 |
|
500,000 |
17,765 |
4,441 |
13,324 |
|
600,000 |
22,515 |
5,629 |
16,886 |
|
700,000 |
27,265 |
6,816 |
20,449 |
|
800,000 |
32,316 |
8,079 |
24,237 |
|
900,000 |
37,466 |
9,366 |
28,099 |
|
1.0m |
42,616 |
10,654 |
31,962 |
|
1.5m |
68,365 |
18,365 |
50,000 |
|
Source: ABC News |
|||
Impact of stamp duty discounts and assistance package to first-home buyers |
|||
Price ($) |
Current duty |
New duty |
Saving |
|
400,000 |
0 |
0 |
0 |
|
450,000 |
3,838 |
960 |
2,879 |
|
500,000 |
13,433 |
3,358 |
10,075 |
|
550,000 |
20,140 |
5,035 |
15,105 |
|
600,000 |
22,515 |
5,629 |
16,886 |
|
650,000 |
24,890 |
6,223 |
18,668 |
|
700,000 |
27,265 |
6,816 |
20,449 |
|
750,000 |
29,740 |
7,435 |
22,305 |
|
800,000 |
32,316 |
8,079 |
24,237 |
|
Source: ABC News |
|||
A win for the sector
The move is an excellent win for property buyers, said Real Estate Institute of Western Australia (REIWA) president Damian Collins.
"By reducing the tax for off-the-plan sales, not only will it help the government to meet its target of 47% of new dwellings in infill locations, but will help increase the speed of transition from apartment sales to actual construction activity," he said.
Also read: What Can Make WA Attractive Again For Investors?
The stamp duty rebate could be taken as an indication that the government understands the challenges under the current market conditions, said Housing Industry Association executive director Cath Hart.
"This will mean a swift boost for building activity, which will be great for local jobs and give industry the confidence to retain and train more workers. With more than 120,000 people employed in construction in WA, the positive impact of this initiative will be felt across the entire home-building supply chain," she said.
More needs to be done
However, Collins said the stamp duty rebate is just a start, and the government needs to look at other ways to help more people break into the market.
One consideration the state government can look into is the increase in the value limit of stamp-duty exemption for first home buyers from $430,000 to $550,000, Collins said.
"In the current real estate climate, we need to help encourage more people to buy. With first home buyers accounting for one-third of all sales in Western Australia, they are the oil of the property engine, and we should be making it easier for them to get into the market, with the help of all sectors," Collins said.
