REIWA calls for tax reform in 2017-18 State Budget
The Real Estate Institute of Western Australia has called on the State Government to implement a range of tax reforms designed to stimulate the WA property market and restore the State Budget to surplus.
In its 2017-18 pre-budget submission, REIWA has cautioned the Treasurer against targeting the property sector with increased taxes, recommending they introduce incentives for first home buyers of established properties and seniors over the age of 65 to help raise much-needed funds for the State.
REIWA President Hayden Groves said this was not the time to consider raising property taxes, particularly in the current market which continued to experience challenging conditions.
“The slowdown in the resources sector has had a massive impact on the WA economy and property market. We’ve seen sales activity continue to trend downwards, with transactions approximately half of what they were a decade ago. That’s a lot of lost transfer duty revenue for the Government.”
“While we appreciate everyone has a role to play in helping bring the Budget back to surplus, no one industry should be targeted. A property is vital to the lives of all West Australians and significantly contributes to state finances already. The State Government should be introducing measures that encourage activity, not stymieing it with disproportionately high taxes,”Mr Groves said.
REIWA’s submission also urges the McGowan Government not to increase transfer duty rates or change thresholds, to make no further changes to rates or thresholds for land tax, and to undertake a state tax review.
Mr Groves said current state taxes, in particular, transfer duty, were a hindrance to buyers moving within the property market. “We encourage the State Government to commit to making housing more accessible and affordable for all West Aussies.
Whilst wholesale tax reform is difficult and not practical now, the conversation should be had with the public about how to reform taxes, and the Government should undertake a state tax review to further the debate,” Mr Groves said.
REIWA’s 2017-18 pre-budget submission recommends the State Government introduce five key areas of reform:
1. Maintain the existing transfer duty exemption for first home buyers at $430,000 and re-introduce the $3,000 FHOG for the purchase of existing dwellings.
2. Introduce a $10,000 concession on transfer duty for seniors over the age of 65 to encourage appropriate ‘right sizing’.
3. Undertake a state tax review to assess the viability of a shift to a broad-based land tax system that ultimately removes transfer duty.
4. No increase to transfer duty rates or change of thresholds.
5. Make no further changes to rates or thresholds for land tax.
“We understand the State Government is in a difficult position when it comes to the State’s fiscal position. Our recommendations are aimed at helping to increase the levels of activity in the established residential market, which would ultimately mean more transfer duty revenue for the Government,”
Mr Groves said.
“REIWA looks forward to continuing to work with the McGowan Government to help restore the budget back to surplus.”
Originaly Published by REIWA