REIWA slams WA budget for lacking 'bold housing reform'

The Real Estate Institute of Western Australia has criticised the state’s 2021-22 budget for lacking “bold housing reform” despite the state boasting a record surplus of $5.6 billion.

REIWA President Damian Collins said the organisation was glad to see the state’s $875 million investment in social housing and a two-year extension of the off-the-plan stamp-duty rebate, but was disappointed that the WA government had failed to commit to stamp-duty reform.

“We welcome the investment in social housing to help address the state’s housing shortage. However, more needs to be done to increase housing supply in the private rental market,” Collins said. “The private sector provides the vast majority of housing, and issues such as stamp duty, as well as the current review of the Residential Tenancies Act and its implications, can have a material impact on the supply of rental housing.”

The WA government announced that it would extend the off-the-plan stamp-duty rebate until 24 October 2023, at a reduced rate of 50% (down from 75%).

“We are pleased the off-the-plan stamp-duty rebate has been extended, albeit at a reduced rate, and urge the WA government to consider making this a permanent feature of the state’s property tax system to ensure an ongoing pipeline of projects, a steady supply of diverse housing, and to aid in the creation of jobs for West Australians,” Collins said.

REIWA called the 2021-22 budget a “missed opportunity for stamp duty reform.” In the lead-up to the release of the budget, the organization called for four areas of reform:

• Introduce a two-stream revenue collection method for stamp duty
• Provide immediate $10,000 stamp-duty relief for those 65 and over
• Lock in the off-the-plan stamp-duty rebate
• Remove stamp duty on the purchase of small businesses

“Whilst the extension of the off-the-plan rebate is welcomed, we are disappointed that none of the other reforms were considered,” Collins said. “We are particularly disappointed no consideration was given to implementing a two-stream stamp-duty revenue collection method.”

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REIWA’s two-stream model would give purchasers the option to pay stamp duty up front, as is currently the case, or opt for an ongoing annual fee calculated at the purchase price of the property.

“Stamp duty is an important revenue earner for the WA government, but it is also an inefficient and inequitable tax that actively discourages homeownership and makes it significantly more difficult for West Aussies to move more frequently,” Collins said. “Reforming stamp duty by implementing a two-stream revenue collection method would remove one of the biggest financial hurdles buyers face and result in a significant productivity boost for our economy. The WA government has missed a golden opportunity in the 2021-22 budget to take advantage of the state’s enviable coffers to deliver bold housing reform that eases one of the most exorbitant cost burdens associated with homeownership.”