Stamp duty, foreign surcharge on WA election agenda

Incentives for property investors are looming as a hot election topic in Western Australia, with both sides of government being urged to develop new initiatives to address a looming rental crisis in the state.

WA is heading to a state election in March, with incumbent Premier Mark McGowan preparing to meet a challenge from newly-appointed Liberal leader Zak Kirkup.

In the sights of the Urban Development Institute of Australia are WA's foreign buyer surcharge and stamp duty reform, with a revamp of both considered necessary to attract international and Eastern seaboard investors into the state.

The reform push comes as the Perth rental market becomes one of the tightest in Australia, with a sub 1 per cent vacancy rate resulting in hot competition for properties among tenants and predictions that rents will rise by as much as 20 per cent once the moratorium on evictions is lifted early next year.

“In the short term we are seeking a commitment to implement a moratorium on the Foreign Buyers Surcharge, which has essentially put a halt on investors buying into the WA apartment market and exacerbating the rental supply crisis,” UDIA WA chief executive Tanya Steinbeck said. 

“We also want to see an extension of the off-the-plan stamp duty rebate scheme,” Ms Steinbeck said. 

“This is another avenue to get more investment happening to supplement the supply of rental accommodation.

“In the longer term, the removal of stamp duty, which is a barrier to people ‘right sizing’ into a more suitable home is required.

“They are doing it NSW, it has been done in the ACT, it is WA’s turn to take the plunge and it will require real leadership from a strong state government." 

While the WA property market has been boosted in recent months by the influx of Australian expats returning home, Ms Steinbeck said a new population growth strategy was necessary to maintain the momentum.

“Sensible population growth will benefit the local economy and provide all West Australians with a more stable future in terms of employment, prosperity and allow investment into much needed infrastructure to keep our cities and regions operating at their best,” Ms Steinbeck said. 

The next government must facilitate sustainable population growth in a way that keeps us all safe while ensuring that we can grow our economy and tap into global opportunities.

“In particular the development of a population strategy that maps out a sustainable plan for population growth is required as a priority." 

Mr McGowan, however, said housing choice and increasing density were some of the WA state government's top reform priorities.

Speaking at a UDIA function, the WA premier said new planning policies that will incentivise and shape medium density development were being developed by the state government and would be finalised by April 2021.

“Perth needs to accommodate an extra 1.5 million people in the next 30 years,” Mr McGowan said.

“That means an extra 800,000 dwellings at a time we all know that Perth and Peel cannot afford to sprawl endlessly. 

“This means we need to be able to provide more housing choice, much of which is in our existing footprint. 

“Perth needs far greater housing diversity and choice than ever before, to suit a variety of Western Australian lifestyles.”

Mr McGowan said there were several suburbs in Perth that demonstrated the potential of good quality infill development.

“The popularity of historic areas like Subiaco and Fremantle are evidence that we can do it very well when we want to,” he said.

“But over the last 30 years we have mostly had one limited firm of medium density, that is shoehorning as many dwellings onto a block as possible, creating a sea of the same rooves, unbroken by trees or ot

“It has cost our community diversity, character and choice, and also has created some community resentment. 

“It is not surprising that in some parts of the community there are some people that are resentful of development.”

The new code, Mr McGowan said, would ensure flexibility for all types of homebuyers.

“We need more options to allow older Western Australians to age in place, to stay in the neighbourhoods that they love and they feel safe in. 

“And we need to connect young people to their families, public infrastructure, services and employment hubs , instead of endlessly sprawling our suburbs without strategic oversight.

“That means changing the rules, that means bold decisions and that means reform.”