Tax bur­den hits af­ford­abil­ity

Pilbara News - - Property - Hay­den Groves

Al­though hous­ing af­ford­abil­ity has im­proved in WA in re­cent times, it re­mains a le­git­i­mate con­cern for many.

A re­cent Hous­ing Af­ford­abil­ity Re­port by the Real Es­tate In­sti­tute of WA and Ade­laide Bank showed while af­ford­abil­ity im­proved in WA on an an­nual ba­sis in the De­cem­ber quar­ter of last year, it had de­clined when com­pared to the pre­vi­ous Septem­ber quar­ter. This rep­re­sents the sec­ond quar­ter in a row af­ford­abil­ity has de­clined.

Given cur­rent mar­ket con­di­tions, which un­doubt­edly favour home­buy­ers, and record low in­ter­est rates, it is con­cern­ing hous­ing af­ford­abil­ity re­mains such a per­ti­nent worry for many West Aus­tralians.

REIWA is a strong ad­vo­cate for ad­dress­ing this is­sue, and firmly be­lieves State prop­erty tax ar­range­ments con­trib­ute sig­nif­i­cantly to this prob­lem.

REIWA sur­veyed the WA pub­lic about this last month, and the re­sponse con­firmed our po­si­tion, with re­spon­dents over­whelm­ingly say­ing prop­erty taxes neg­a­tively af­fected their lives. Clearly, some­thing needs to change.

The good news is WA re­mains one of the most af­ford­able States in the coun­try for hous­ing, par­tic­u­larly in com­par­i­son to east coast prop­erty mar­kets such as NSW, where the me­dian house price is higher and firsthome­buy­ers strug­gle to en­ter the prop­erty mar­ket. Here in WA, home­own­er­ship is still very much at­tain­able.

In fact, we have the high­est pro­por­tion of first-home­buy­ers in Aus­tralia, with the Hous­ing Af­ford­abil­ity Re­port re­veal­ing 21 per cent of all owner-oc­cu­pier home loans in WA in the De­cem­ber quar­ter were to first-home buy­ers.

Home loans to first-home­buy­ers in NSW made up only 8.2 per cent of all loans dur­ing that same pe­riod.

How­ever, more needs to be done.

While the new La­bor Gov­ern­ment faces a chal­leng­ing fis­cal en­vi­ron­ment, REIWA still be­lieves an in­cre­men­tal re­form of prop­erty taxes will en­cour­age both owner-oc­cu­pa­tion and in­vest­ment.

Trans­fer duty is one of the most in­ef­fi­cient and in­ef­fec­tive taxes.

In the long term, we would like to see the Gov­ern­ment transition to a broad-based land tax in­stead of re­ly­ing on trans­ac­tional taxes.

We call on the McGowan Gov­ern­ment to com­mit to con­duct­ing a State tax re­view and to look at more sus­tain­able ways to fund es­sen­tial ser­vices in WA. Hay­den Groves is the pres­i­dent of the Real Es­tate In­sti­tute of Western Aus­tralia.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.