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The Real Estate Institute of Western Australia (REIWA) is calling for current stamp duty rebates for off-the-plan purchases to be made permanent ahead of the WA state election.
The plea — contained within a REIWA state government submission, and reiterated more recently by the state body — comes as estimates reveal off-the-plan unit purchases comprised one-third of all 2020 unit purchases in the state.
According to REIWA president Damian Collins, it’s important that the rebate becomes a permanent feature of Western Australia’s property tax system.
Not only would it secure ongoing construction jobs, it would aid in limiting urban sprawl, he flagged.
“The current 75 per cent stamp duty rebate for off-the-plan construction apartments has been essential in ensuring an ongoing pipeline of projects,” the president stated.
“We firmly believe that without this ongoing incentive, the demand for WA apartments will soften, impacting the steady supply of diverse housing and the creation of jobs for Western Australians.”
Mr Collins also noted that prior to the rebate’s introduction, off-the-plan apartment buyers were having to pay stamp duty on the combined value of the land and build.
This was at odds with tax-payable house and land packages, where the purchaser has consistently been taxed solely on the land’s value.
He argued that the discrepancy “puts an unfair financial burden” on those looking to buy off the plan, with a number of potential purchasers forced to look elsewhere.
In some cases, the president said it’s even pushed people to buy in Perth’s outer suburbs — “in direct contradiction to the WA government’s commitment to reducing urban sprawl and promoting infill developments”.
While the 75 per cent rebate currently in place is countering this issue in the short term, Mr Collins warned that without a permanent scheme, apartment buyers would go back to being significantly disadvantaged when the rebate program ends in October.
“If our state is going to continue to recover from the economic impacts of COVID-19, we need to ensure apartments remain desirable for buyers so there is a healthy supply of construction projects and jobs available,” he concluded.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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