Real estate industry leaders are urging Western Australia’s major political parties to follow Canberra’s lead and abolish stamp duty.
Jones and Co director Kelly Jones said Canberra was leading the nation on stamp duty reform, but in Western Australia the tax remained the most substantial barrier to homeownership.
She said a buyer of a $500,000 residential property in the ACT would now pay $9100 less in stamp duty than when the tax reforms started in 2012.
As part of a 20-year plan, the ACT is phasing out the tax and replacing it with higher property rates.
Kelly said a median-priced home in Canberra ($700,000) would carry a stamp duty of $20,000. While that was still very costly, it was significantly better than the $32,000 duty homeowners would have paid before the reforms began. By comparison, stamp duty on the same property in Perth today would be $27,265.
The ACT’s reforms will be delivered in four five-year stages and include a move to a broad land tax through general rates. Before the start of each stage the government announces the cuts to stamp duty rates for the coming period and sets the target average annual general rates increase for residential and commercial properties.
But in March, WA Premier Mark McGowan said stamp duty reforms post-pandemic were not conducive to “getting things moving quickly”.
Mr McGowan ruled out the abolition of stamp duty in favour of a broader tax system.
“If you want to get rid of stamp duty, you have to replace it with something else, a rate on every single household probably of thousands of dollars every year,” he said. “I’m not sure that would promote confidence in the economy.”
But Opposition Leader Liza Harvey said stamp duty was definitely on the table.
“How do we get more West Australians working? If that means significant reform to things like stamp duty, well don’t rule it out. Put it on the table and see if that’s a way to stimulate our economy, ” she said.
WA’s Liberal opposition proposes a 75 per cent cut in stamp duty for house and land packages.
REIWA President Damian Collins said he looked forward to working with the Liberal Party on developing policy for stamp duty reforms and encouraged the McGowan Government to also commit to removing the tax.
“With other states looking at stamp duty removal in detail, WA needs to ensure it is not left behind and should lead the way with a state tax reform,” Mr Collins said.
In the 2018-19 financial year, the WA Government collected about $1.1 billion in stamp duty.
Property Council of Australia WA executive director Sandra Brewer said there needed to be more honest dialogue about the impact of stamp duty on the State’s property industry.
“We have been encouraged by some of the proactive measures taken by the McGowan government in recent times on stamp duty,” she said. “The 75 per cent stamp duty rebate for off-the-plan apartment purchases is a great start.”
Urban Development Institute of Australia (UDIA) executive director Connie Kirk said stamp duty remained one of the most inefficient taxes in Australia’s economy.
“Stamp duty hurts people trying to enter the housing market, families moving into bigger houses as they grow and seniors looking to downsize later in life,” she said. “We appreciate any substantial tax reform is a long-haul exercise, but it is time for governments to start planning for a switch from stamp duties to more broad-based measures such as land tax.
“An overhaul of property taxes is well overdue given the excessive burden carried by the industry and homebuyers.”
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