WA Budget delivers stamp duty concessions for first home buyers

The WA State Budget has delivered some relief to first home buyers with an increase to the stamp duty concession threshold.

As part of the 2024-25 State Budget, the Cook Government will increase the first home buyers transfer duty concession threshold for established homes from $530,000 to $600,000, and the exemption threshold from $430,000 to $450,000.

The reforms will provide total savings of up to $15,390 and benefit almost 5,000 first home buyers each year, as part of a $1.1 billion housing and homelessness package.

Under the new system a first home buyer purchasing a $450,000 property will pay no stamp duty, providing a total saving of $15,390. A first home buyer purchasing a $530,000 home will receive the maximum additional saving of $7,180 under the revised thresholds.

The changes took immediate effect.

The Budget also included a range of previously announced measures to boost housing supply.

This week the Roger Cook Labor Government announced the Vacant Property Rental Incentive Scheme, providing $5,000 to owners of vacant properties who make their property available as a long-term rental.

Being able to put a nail in the wall and hang a picture means very little for people who can’t get into a home.

- Steve Martin, Shadow Housing Minister

The successful Short-Term Rental Accommodation (STRA) Incentive Scheme, which has provided rental homes for 150 households so far, has also been extended.

Cath Hart, CEO, Real Estate Institute of Western Australia (REIWA), said that while there was no silver bullet to address the challenges WA’s housing market faces, she welcomed the fact the Government has opted for incentives to boost housing supply, rather than punitive measures such as new taxes as has been seen in other states.

“The vacant property and STRA initiatives will help put a roof over more families’ heads by incentivising property owners to participate in the long-term rental market, rather than introducing punitive measures such as vacancy taxes or levies on properties offered on the short-stay market as we’ve seen elsewhere.”

WA Treasurer Rita Saffioti said the government was trying to make housing more affordable across the state.

"This (stamp duty concession) is an important measure to assist first home buyers purchasing a home, especially given the growth in house prices since the property value thresholds for this scheme were last changed in 2014.

“This additional assistance provides targeted relief to first home buyers, supporting them in purchasing a home that will meet their needs.

“It may also allow first home buyers to move out of existing rental housing, freeing up homes to rent.”

The Government has also invested an additional $400 million to expand the Social and Affordable Housing Investment Fund to deliver another 1,000 social homes.

$92.2 million has been allocated to support more than 120 homelessness services across WA. Another $34.8 million has also been provided to unlock regional WA’s development-ready land for new housing in Broome, Karratha and Kalgoorlie.

Liberal Party opposition unimpressed by housing measures

Shadow Housing Minister Steve Martin described the Government’s attempt to entice owners of vacant houses to rent out their properties as a “band-aid measure”.

“The scheme is a knee-jerk reaction from a government hell-bent on showing it had no understanding of the private housing market.

“After pushing through their Residential Tenancies Act changes a few weeks ago, making it less attractive for property owners to rent out a house, they’re now turning to taxpayers to hand out grants and fix their mistake.

“These $5,000 payments do nothing to address the long-term structural problem – the mismatch of supply and demand.

“With rental yields as high as they currently are, I’m sceptical how many people who have had a home vacant for six months or more will suddenly change their plans and put their home up for rent for $5000.”

Mr Martin said the RTA changes had created significant new risks for renters.

“The cap on rent rises to once a year simply means renters will face a large rent hike once a year as homeowners have to factor in a full year’s worth of potential cost pressures on their budgets,” he said.

“Government policy needs to make it as attractive as possible for homeowners to rent out their homes long-term. They’ve done the opposite of that. The RTA changes discourage homeowners from putting their homes up for rent.”

“Being able to put a nail in the wall and hang a picture means very little for people who can’t get into a home.

“We need to build more homes to keep pace with our state’s growth.

“We continue to hear industry groups pleading with the government to support home builders teetering on the edge of bankruptcy with loss-making jobs on the books, surely getting those homes finished and keeping those builders viable makes sense even to the Cook Government.

“Labor announced interest-free loans for builders in January but 124 days later not a single loan has been paid out, and more builders, such as Collier Homes, have gone under.”

Housing shortfall predicted

Master Builders Association Western Australia (MBA) was more receptive to the Budget housing and building measures.

MBA CEO Matthew Pollock said the state needed to attract and train an additional 40,000 to 50,000 people into the construction workforce between now and the end of 2026 to build the houses and the infrastructure required to support a strong and growing WA economy.

“The $1.8 billion economic diversification and decarbonisation transition will rely heavily on a bigger and better resourced construction industry.

“This is a huge opportunity for West Australians to take up rewarding and well-paid careers to build this transition.

“There is an additional $1.6 billion into regional infrastructure, particularly into health and education and it will be important that we have support to build the workforce in these regions to deliver these projects.

“The budget shows how important a strong construction industry will be to support WA’s strong economy over the next four years.”

The Urban Development Institute of Australia (UDIA WA) warned that more will need to be done to make a dent in a forecast 30,000 housing shortfall over the next five years. 

Tanya Steinbeck, CEO, UDIA WA, said an “eye-watering” $42.4 billion infrastructure spend over the next four years will continue to challenge residential construction sector capacity, even with the welcome $85 million boost to fund 150 more apprentices. 

“UDIA WA is forecasting a 30,000 shortfall in housing supply over the next five years.

“With significant increases expected in house prices due to dwindling stock levels, housing affordability and availability will get worse before it gets better. 

“The private sector delivers 96 per cent of housing supply in Western Australia and with construction cost pressures in apartments making affordable, high density difficult to deliver – we need to ensure that we address blockages in the supply pipeline that are preventing developers from delivering more homes, faster,” Ms Steinbeck said.