Ensure you never miss an issue of the
real estate business bulletin
Stamp duty changes could cause massive damage

Stamp duty changes could cause massive damage

by Steven Cross 2 comments

Concerns that one state government may change stamp duty legislation in the upcoming Budget have sparked warnings from the industry.

According to Real Estate Institute of Western Australia (REIWA) president David Airey, pressure on the state government to cut costs and raise revenue may cause increased stamp duty costs and the removal of stamp duty exemptions for first home buyers.

“The property market in WA is only just stabilising after several volatile years, while current REIWA data indicates a market downturn for the second half of this year.

“It’s critical that current policy settings remain in place and property taxes are not increased, distorting a fragile market,” Mr Airey said.

Mr Airey labelled the stamp duty exemption, introduced in 2007, as "extraordinarily successful" for keeping the property market afloat.

“Cost of living and housing affordability is much tougher in WA than it is in other states, but removing the stamp duty impost from first home buyers saves most of them around $14,000 and helps them get into a home of their own.

“In combination with low interest rates first home buyers have flourished in WA, but the signs are that this is now trending downwards and it would be devastating if they soon get hit with stamp duty,” Mr Airey said.

Speaking with Real Estate Business, director of Abel McGrath Property Group, Adrian Abel, said that even the top end of the market will be hit hard if first home buyer exemptions are removed. 

"Stamp duty is the number one deterrent to real estate transactions," Mr Abel said.

"I transact over $100 million in property each year, but I still talk to clients who would prefer to renovate rather than relocate because of the costs of stamp duty."

While he believes raising stamp duty would be an unlikely event, other states have removed or reduced the aid given to first home buyers.

"It's a very real threat to the market if the exemption is removed, even at the $1 million-plus end of the market," Mr Abel said.

"It's like a ripple effect. When demand for the lower end of the market drops, it flows on to the next tier of upgraders and investors, until the whole market feels it."

Mr Abel also believes sentiment would be damaged through media coverage if first home buyers are dealt a poor hand from the Budget.

Stamp duty changes could cause massive damage
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?