WA stamp duty rebate scheme slashed, but extended

Apartment buyers in Western Australia have been given an extra two years to access stamp duty rebates for off-the-plan purchases, but the scheme has been cut from 75 per cent to 50 per cent.

WA Premier Mark McGowan announced the state government would extend its stamp duty rebate scheme as part of the WA state budget, which delivered a record $5.6 billion surplus, largely driven by a big lift in iron ore royalties.

The stamp duty rebates, which apply to off-the-plan purchases pre-construction and are capped at $50,000, will now be available until October 2023.

Buyers have until October this year to access the 75 per cent rebates, after which time they will be reduced to 50 per cent.

Mr McGowan said the extension was one of a range of measures the state government had put in place to improve housing affordability and facilitate growth in construction.

“We have seen enormous activity in the construction sector over the past year, which will translate to more affordable homes and more jobs,” Mr McGowan said in a statement.

Industry groups have welcomed the announcement, with Urban Development Institute of Australia WA executive director Tanya Steinbeck saying it would be critical to attract investors into WA’s apartments market.

“The loss of investors in WA has negatively impacted all segments within the Perth property market,” Ms Steinbeck said. 

“However, it has disproportionately affected built-form developers who are heavily reliant on pre-sales in order to commence projects.

“UDIA fully supported the introduction of the rebate scheme in October 2019 and it has been demonstrably successful in getting more new apartment projects off the ground and creating jobs.

“We hope that continuing the scheme will also have a positive impact on the current low vacancy rate.”

Real Estate Institute of WA president Damian Collins, however, said while he welcomed the extension, the new budget missed a big opportunity for bold reform.

“We welcome the investment in social housing to help address the state’s housing shortage, however, more needs to be done to increase housing supply in the private rental market,” Mr Collins said.

“The private sector provides the vast majority of housing and issues such as stamp duty, as well as the current review of the Residential Tenancies Act and its implications, can have a material impact on the supply of rental housing.

“We are pleased the off-the-plan stamp duty rebate has been extended, albeit at a reduced rate, and urge the WA government to consider making this a permanent feature of the state’s property tax system to ensure an ongoing pipeline of projects, a steady supply of diverse housing and to aid in the creation of jobs for West Australians.”

Mr Collins said REIWA had been lobbying for more significant change to the state’s stamp duty regime, including the introduction of a two-stream revenue collection model similar to the reform under way in New South Wales.

“Stamp duty is an important revenue earner for the WA government, but it is also an inefficient and inequitable tax that actively discourages home ownership and makes it significantly more difficult for West Aussies to move more frequently,” he said.

“Reforming stamp duty by implementing a two-stream revenue collection method would remove one of the biggest financial hurdles buyers face and result in a significant productivity boost for our economy.”

UDIA’s Ms Steinbeck agreed that more meaningful stamp duty reform would be a “brave step forward” for the state government.

“We see in the budget figures how revenue from transfer duty ebbs and flows with the market,” Ms Steinbeck said. 

“A broader based tax system, like what they are implementing in NSW, would be a welcome move and remove one of the biggest barriers to people downsizing or rightsizing into more appropriate homes.”