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Stamp duty cut for off-the-plan apartments in bid to boost WA’s ailing property market

Apartment towers in Rivervale, Perth
Written by The ReReport
As seen in the Source link, written by abc.net.au on 2019-10-23 15:38:52

Updated

October 23, 2019 15:56:55

Stamp duty rebates of up to $50,000 will be offered to West Australian property buyers purchasing new off-the-plan apartments in a bid to revive the state’s struggling property sector.

Key points:

  • The new measures cut stamp duty, but only for apartments bought off the plan
  • It follows a plea from the real estate lobby to help boost the industry
  • New measures to ease housing taxes have also been announced by the Opposition

The 75 per cent stamp duty discount would be available to people who signed a pre-construction contract to purchase a new apartment within the next two years.

For a $500,000 apartment, the change would represent a stamp duty saving of more than $13,000.

There is no purchase price cap on the policy, which has been put in place for two years, and people buying more than one unit would be eligible for multiple rebates.

General buyer savings

 Price ($) Current duty New duty Saving
300,000 8,835 2,209 6,626
400,000 13,015 3,254 9,761
500,000 17,765 4,441 13,324
600,000 22,515 5,629 16,886
700,000 27,265 6,816 20,449
800,000 32,316 8,079 24,237
900,000 37,466 9,366 28,099
1,000,000 42,616 10,654 31,962
1,500,000 68,365 18,365 50,000

The discount will also apply to the foreign property surcharge, which the industry has long argued has caused demand from overseas buyers to plummet.

The decision followed repeated pleas for help from the property sector, which has been hit hard by WA’s economic slump and a fall in demand that has seen house prices plummet.

First home buyer savings

Price ($) Current duty New duty Saving
400,000 0 0 0
450,000 3,838 960 2,879
500,000 13,433 3,358 10,075
550,000 20,140 5,035 15,105
600,000 22,515 5,629 16,886
650,000 24,890 6,223 18,668
700,000 27,265 6,816 20,449
750,000 29,740 7,435 22,305
800,000 32,316 8,079 24,237

Earlier this week the ABC revealed 22.5 per cent of apartments sold off-the-plan in WA were valued at less than their purchase price by the time they were completed

Property downturn prompts action

WA Treasurer Ben Wyatt said the Government was responding to the decline in market conditions.

“This I think will have a dramatic impact in respect to getting early investment, ensuring construction starts on these sorts of apartment complexes,” he said.

“You have got to get a lot of sales to ensure that banks then finance and get them underway.”

The announcement comes less than a week after a delegation of property industry leaders pleaded with the Government to stimulate the sector, proposing a range of concessions around eligibility for Keystart loans and stamp duty.

They have also called for the foreign property tax to be slashed from 7 to 4 per cent.

Industry groups strongly welcomed today’s announcement, saying it would encourage people back into the market.

“I think this has come just at the right time for the sector,” Master Builders Association executive director John Gelavis said.

But he said the industry still hoped the Government would do more to help the sector.

“I think it is a good time to be looking at these announcements and what else we can do to help stimulate the sector over the next three or four years,” he said.

The Government’s announcement came on the same day the Liberal Party also announced new pre-election policies designed to stimulate the property sector.

Those included a moratorium on the tax on property purchases by foreigners, stamp duty relief for seniors downsizing and an increase to the payroll tax threshold.

The Government’s policy was expected to cost $29 million over two years, with Premier Mark McGowan saying the state’s improved budget position would be used to attempt to create jobs and stimulate the economy.

Topics:

state-parliament,

states-and-territories,

government-and-politics,

tax,

housing-industry,

perth-6000,

wa

First posted

October 23, 2019 15:38:52