Tax reform needed to reinvigorate WA economy

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Tax reform needed to reinvigorate WA economy

The Property Council is calling for strategic tax reforms to balance the tax system, support other policy initiatives and remove the economic hand-brakes stifling WA’s growth.

Specifically, the Property Council wants the WA Government to take immediate action to reduce the unfair stamp duty burden on off-the-plan dwelling purchases and for seniors looking to downsize into more appropriate housing.

 “With federal calls for national tax reform growing louder, it is time for the state to stand up and do its part to rebalance the unfair stamp duty system.” Property Council WA Executive director Joe Lenzo said.

“An ineffective and inefficient tax system is putting an undue burden on the property market and is stalling critical growth. Immediate action must be taken to support the state’s growth plans for metropolitan Perth.”

The Property Council is calling on the State Government to:

  • Only apply stamp duty to the land value component in off-the-plan dwelling purchases prior to construction
  • Introduce a grant of $80 for persons over 60 years of age selling their existing residence and purchasing a newly built principle place of residence up to $5,000

Applying stamp duty only on the land component of off-the-plan dwelling purchases will also promote higher density housing development which is necessary for the state to hit its ambitious infill targets.

“WA’s infill housing development is in desperate need of resuscitation with the Government only achieving an infill rate of around 30%.  For Perth to hit the infill targets set out in Perth and Peel @ 3.5 million, tax reform is needed. Our proposal will promote urban development, boost construction and help achieve the state’s infill targets,”

The proposal to introduce a one-off grant for seniors selling up and moving home would facilitate downsizing, promoting housing mobility and fostering greater housing diversity for other buyers.

“By encouraging older West Australians to downsize, through a grant incentive, the Government can promote housing mobility while supporting them move to more appropriate housing.”

“A fairer, more efficient tax system will boost the economy as it continues the transition from a resource based economy to a more broad-base. These reforms can be the catalyst to allow the property industry to take center-stage in the transition and keep WA growing.