REIWA calls for ‘over­due’ prop­erty tax re­form

Western Suburbs Weekly - - State Election ‘17 - By NATALIE HOR­DOV

THE Real Es­tate In­sti­tute of WA wants the next State Gov­ern­ment to com­mit to re­form­ing prop­erty taxes.

Its wish list in­cludes no in­creases to State prop­erty taxes, abo­li­tion of land tax ag­gre­ga­tion rules, trans­fer duty con­ces­sion for off- the- plan transactions and trans­fer duty ex­emp­tions for se­niors “right siz­ing” into more suit­able dwellings.

REIWA pres­i­dent Hay­den Groves said re­forms were over­due, with the prop­erty mar­ket chang­ing sig­nif­i­cantly over the years, and would ben­e­fit both the mar­ket and the gov­ern­ment.

“The State Gov­ern­ment is heav­ily re­liant on prop­erty taxes; 33 per cent of their rev­enue re­ceipts come from prop­erty taxes, and of that 50 per cent is trans­fer duty, so half of a third of their in­come is tied to the volatil­ity of the mar­ket,” he said.

“A fall in trans­ac­tional ac­tiv­ity puts pres­sure on the gov­ern­ment, and in the past 10 years sales vol­umes have fallen 52 per cent from 71,663 at the end of Novem­ber 2006 to 34,138 in the 12 months to the end of Novem­ber 2016.

“Transactions have halved and their rev­enue from stamp duty has about halved.”

Mr Groves said in­creas­ing stamp duty was not a vi­able op­tion as it would af­fect af­ford­abil­ity and dis­cour­age peo­ple from mov­ing, fur­ther im­pact­ing neg­a­tively on the over­all mar­ket.

“In the ab­sence of gen­uine long-term tax re­form, we want the gov­ern­ment and the Op­po­si­tion and ev­ery other po­lit­i­cal party to com­mit to re­view­ing their state taxes and find­ing more sus­tain­able ways in which to gen­er­ate in­come at a state level, be­cause at the mo­ment it’s just not sus­tain­able,” he said.

Mr Groves said REIWA’S wish list was de­signed to be re­al­is­tic, achiev­able and easy to im­ple­ment.

It hoped to get sup­port for all four, but con­ces­sions for se­niors “right siz­ing” and off-the-plan apart­ment pur­chases were its pre­ferred op­tions.

“They would have an im­me­di­ate and pos­i­tive im­pact on the mar­ket, and not only the prop­erty mar­ket,” Mr Groves said.

“One of the block­ages associated with trans­ac­tional ac­tiv­ity is trans­fer duty. When you re­move trans­ac­tion costs you make hous­ing more af­ford­able; let’s cre­ate ac­tiv­ity in a way that makes it af­ford­able for peo­ple to en­ter the mar­ket or con­tinue to in­vest in the mar­ket.

“But I’m not just talk­ing about (more) trans­ac­tional ac­tiv­ity, I’m talk­ing about plan­ning pol­icy dove­tail­ing into Direc­tions 2031, hous­ing af­ford­abil­ity, re­leas­ing as­pi­ra­tional stock out there into the mar­ket, stim­u­lat­ing trans­fer ac­tiv­ity; it would cover a lot of bases.”

De­spite nu­mer­ous announcements since the elec­tion pe­riod for­mally com­menced last week, nei­ther Lib­eral nor La­bor have of­fered an out­come to the real es­tate in­dus­try.

Trea­surer Mike Na­han said WA would need to sig­nif­i­cantly in­crease its cur­rent land tax rate to abol­ish trans­fer duty, which was not prac­ti­cal.

Hay­den Groves.

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