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The Real Estate Institute of Western Australia (REIWA) has called for a $100,000 increase to the state’s duty-free threshold.
In order to encourage home ownership within the state, RIEWA says the Western Australian government should bump up the threshold at which first-time buyers must pay stamp duty from $430,000 to $530,000.
Despite Perth boasting the second-most affordable housing market in the country and the highest proportion of first home buyers in its owner-occupier market of any state or territory, REIWA insists increasing the stamp-duty threshold is pivotal in ensuring first home buyers remain a key, active component in the state’s market.
The institute stated that stamp duty is one of the biggest financial inhibitors to home ownership, particularly for prospective first home buyers, and presents an added barrier of discouragement to home ownership by increasing the debt buyers take on by thousands annually.
Calls to increase the FHOR threshold have been issued by the institute before and were included in the institute’s pre-budget submissions ahead of the 2022-23 budget, with REIWA president Damian Collins calling on the state government to implement micro-reform to ease pressure on the housing market.
“REIWA believes WA is in a prime position to deliver bold housing reform now, however we do appreciate that these are uncertain times.
“The pandemic is not an excuse to take tax reform off the table altogether though. There are smaller, more practical reforms that if implemented would target stamp duty without requiring a major upheaval of the state’s taxation system,” Mr Collins said.
“It is important that the WA market remains accessible for first home buyers. We need to ensure that the duty-free thresholds and concessional rates for first home buyers are reflective of where the market is at.
“We have seen strong price growth across the state over the last 18 months, so it is time to adjust the thresholds to ensure the dream of home ownership remains achievable for West Australians.”
According to the institute’s latest data, the median housing price in Perth is $525,000, meaning increasing the FHOR duty-free threshold would encompass many of the houses available on the Western Australian property market and, as such, further encourage first home buyer property purchases.
REIWA believes that ensuring the duty-free thresholds and concessional rates for first home buyers are reflective of the current market position will ease the financial burden placed on these buyers, which will in turn increase first-home ownership and consequently free up rental stock in the event of a Western Australian rental shortage.
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