17 May 2012
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The Real Estate Institute of Western Australia offered a mixed reaction to the state budget handed down in parliament today.
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REIWA President David Airey said that while he welcomed the state government's budget initiatives on affordable housing, he was disappointed there were no stamp duty concessions for older citizens looking to downsize their housing.
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"This was a lost opportunity to free-up housing capacity at a time when supply is tight.
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"Many older people live in big family houses long after their children have left, and which they can't afford to maintain because they don't have the cash to fund the changeover.
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"This prevents many people from moving to more affordable and appropriate dwellings, and in doing so they free-up more stock to the market," Mr Airey said.
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Mr Airey said the Perth rental market is under enormous pressure caused by growing population, with low vacancy rates and increasing rents. Many families are finding it difficult to secure suitable housing.
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"I'm pleased to see the government has retained its stamp duty concession for first homebuyers, because this has been successful in maintaining first homebuyers at around 25 to 27 per cent of the market over the past twelve months.
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"The importance of the stamp duty concession for first homebuyers in the modest market recovery currently being experienced cannot be underestimated," Mr Airey said.
REIWA analysis of the budget papers indicates that, as usual, property buyers will carry much of the burden of the shortfall in GST revenues as the government, by not indexing thresholds, reaps the windfall gain from projected price and sales volume increases.
"The government anticipates receiving $6.6 billion in stamp duty payments over the next four years with almost $2 billion projected in 2015-16 alone.
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"Hopefully the government will see fit to reform these tax thresholds before then so that buyers don't get caught in bracket creep,' Mr Airey said.
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On a positive note, Mr Airey said many REIWA members would be very pleased that the government has removed payroll tax for small businesses with a payroll of up to $1.5 million.
"This removes an unnecessary impost on small business profitability," Mr Airey said.