Se­niors may get trans­fer duty con­ces­sions

Western Suburbs Weekly - - News -

SE­NIORS down­siz­ing or “right siz­ing” can look for­ward to trans­fer duty con­ces­sions if the State Gov­ern­ment is re-elected next month.

El­i­gi­ble se­niors would pay no stamp duty on new and es­tab­lished homes worth up to $440,000 and re­ceive a con­ces­sion of up to $15,000 for prop­erty val­ued up to $750,000.

There would also be a con­ces­sion of up to $10,000 for a va­cant lot up to the value of $400,000.

The con­ces­sion would be in­tro­duced at the start of 2018 and ini­tially ap­ply for two years.

To qual­ify, se­niors must be over 65 and sell­ing their ex­ist­ing home.

The Real Es­tate In­sti­tute of WA (REIWA) and the Coun­cil on the Age­ing (COTA), which have been cam­paign­ing for an ex­emp­tion for trans­fer duty for se­niors look­ing to “right size,” wel­comed the com­mit­ment from the State Gov­ern­ment.

In the lead up to the elec­tion, REIWA sur­veyed the WA pub­lic about the is­sue, ask­ing re­spon­dents what their great­est con­cern was for their se­nior years.

Af­ford­abil­ity was a con­cern for 44 per cent of the 432 re­spon­dents, fol­lowed by lo­ca­tion (25 per cent) and suit­abil­ity (21 per cent).

Ad­di­tion­ally, 92 per cent of re­spon­dents said they would be more in­clined to move house in their se­nior years if an ex­emp­tion to trans­fer duty was in­tro­duced.

REIWA pres­i­dent Hay­den Groves said he was thrilled the Bar­nett Gov­ern­ment had com­mit­ted to eas­ing the bur­den of trans­fer duty for se­niors.

“Trans­fer duty cre­ates a sig­nif­i­cant bar­rier for se­niors over 65 on fixed in­comes who are look­ing to change their life­style or down­size,” he said.

“The cost of trans­fer duty on a me­dian house price of $520,000 is $18,715, which is al­most equiv­a­lent to the en­tire an­nual stan­dard aged pen­sion of $20,745.40.

“The $15,000 con­ces­sion the Gov­ern­ment have com­mit­ted to, which is capped at $750,000, will make a sub­stan­tial dif­fer­ence to those se­niors look­ing to “right size” into more suit­able ac­com­mo­da­tion, and will help ad­dress the is­sues of hous­ing af­ford­abil­ity, choice and live­abil­ity.”

COTA WA chief ex­ec­u­tive Mark Teale said the an­nounce­ment was pos­i­tive news, with one in three vot­ers in WA over the age of 60 and se­niors mak­ing up 19 per cent of WA’S pop­u­la­tion.

“Over­whelm­ingly older West Aus­tralians want to stay liv­ing in their own home, in the lo­cal com­mu­ni­ties they con­trib­ute so much to, and where their fam­ily and friends are,” he said.

“It’s im­por­tant to en­cour­age age­ing in place by pro­vid­ing se­niors with ac­cess to ap­pro­pri­ate hous­ing op­tions.”

Hous­ing In­dus­try As­so­ci­a­tion ex­ec­u­tive di­rec­tor John Gelavis said the pol­icy was a mas­ter­stroke in the hous­ing af­ford­abil­ity de­bate and would open up many more hous­ing op­tions, stim­u­lat­ing the home build­ing and in­fill de­vel­op­ment in­dus­try and the broader real es­tate mar­ket.

“Western Aus­tralia’s pop­u­la­tion is ag­ing and in­creas­ingly we see baby boomers whose eq­uity is locked up in their quar­ter acre block in the in­ner suburbs,” he said.

“The homes are ag­ing and the prop­erty is too much for them to main­tain, but they don’t move as the cost of buy­ing a smaller home nearby is sig­nif­i­cantly in­creased by stamp duty.

“Re­duc­ing that cost will have a three­fold ben­e­fit – the large in­fill prop­erty will be­come avail­able for de­vel­op­ment, help­ing to meet den­sity tar­gets; in­fill lots will be­come more read­ily avail­able, re­duc­ing the squeeze on prices that comes with lack of sup­ply; and most crit­i­cally, se­niors will be able to find and move into a home that is suit­able for them to age in.”

REIWA also ex­pects the trans­fer duty re­form to re­lease more homes, par­tic­u­larly fam­ily homes in de­sir­able ar­eas, to the mar­ket, giv­ing trade-up buy­ers more choice and boost­ing mar­ket ac­tiv­ity, which would also have a pos­i­tive im­pact on state rev­enue.

“REIWA’S anal­y­sis es­ti­mates the pol­icy re­form would re­lease 21,000 homes into the mar­ket,” Mr Groves said.

“While the con­ces­sion would cost the State Gov­ern­ment $303 mil­lion from the 21,000 se­nior house­holds “right siz­ing,” the re­sult­ing trade-up ac­tiv­ity would gen­er­ate ad­di­tional trans­fer duty rev­enue in the or­der of $393 mil­lion, leav­ing a net sur­plus of $90 mil­lion.

“Even if a more con­ser­va­tive num­ber of prop­er­ties were re­leased into the mar­ket, the dif­fer­ence in prop­erty val­ues trans­acted will still pro­vide a net gain for gov­ern­ment cof­fers.”

Source: REIWA

REIWA pres­i­dent Hay­den Groves.

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