Tax reform required in WA
Elections, especially State elections, are always of particular interest to the real estate industry as campaign promises and policy decisions can have significant implications for the buying, selling and investing of property.
In the lead-up to the election, REIWA will be campaigning for the reform of State property taxes. The current State tax arrangements are a hindrance to many people wanting to get their foot in the door of the WA property market.
Transfer duty (formerly stamp duty) is a massive impost on buyers moving within the property market. It has been one of our key recommendations for the past couple of years that there be no increase to transfer duty or land tax rates and that there should be a transfer duty exemption for purchases of off-the-plan properties and a rebate or exemption for seniors who wish to downsize or resize.
We would also like to see the State Government commit to a State tax review in 2017 to provide long-term tax reform in WA.
In our 2016-17 pre-Budget submission, we recommended that the Government assess the viability of a shift to a broad-based land tax system that ultimately removes transfer duty from the WA tax system.
The removal of transfer duty would help improve housing affordability across the State as most households need to borrow funds to cover the cost of this duty. Once borrowed, that cost is then amortised across the life of their mortgage and ultimately increases their total repayment amounts every month.
I sincerely hope the Government considers implementing a land-based tax regime as there would be a number of benefits for the community. For example, it would allow for greater housing mobility and provide households with more freedom to locate closer to employment and activity centres, which would help reduce congestion. As the election draws closer, we look forward to having conversations with all political parties and working together with them to help address problems around affordability, mobility and choice in the housing sector that are affected by property taxes.
We want you to have your say on this issue. Look out for the surveys and polls REIWA will be running on reiwa.com in the coming weeks. This is your chance to voice your opinion on the housing issues and I hope you take this opportunity to help shape the debate.