Seniors may get transfer duty concessions
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.”
REIWA president Hayden Groves.