WA State Budget Good News For Property Owners
The 2017 Western Australian State Budget left property taxes alone, but introduced a new 4 per cent foreign-owner duty surcharge.
The McGowan Government has listened to the concerns of the Western Australian property industry and did not change property taxes in the 2017 State Budget.
The treasurer, the Hon Ben Wyatt MLA, said the state government did not consider increasing property taxes for Western Australian residents as a budget repair measure, recognising the impact of the three consecutive land tax increases in previous budgets.
REIWA deputy president Damian Collins welcomed the decision.
“REIWA welcomes the state government’s commitment to keep property taxes on hold for WA residents, and whilst some of the reforms we recommended were not addressed in the Budget, we appreciate the current fiscal position,” he said.
Related content: Perth property prices could tick higher this spring: REIWA
The four per cent foreign-owner duty surcharge
The Western Australian government plans to introduce a four per cent foreign-owner duty surcharge from 1 January 2019. This measure is expected to raise $49 million by 2020-21.
Collins warned foreign investors should not be further discouraged.
"Despite foreign investors only representing a small proportion of the Western Australian property market, caution must be placed to ensure this section of the market does not reduce further."
Collins warned that even though the Western Australian government expects to raise revenue from the surcharge, transfer duty revenue may actually decline if foreign investors are discouraged from buying residential property in Western Australia.
REIWA recommendations
In its pre-budget submission, REIWA recommended the government:
- Make no further changes to rates or thresholds for land tax.
- Don't increase transfer duty rates or change thresholds.
- Undertake a state tax review to assess the viability of a shift to a broad-based land tax system that ultimately removes transfer duty.
- Maintain the existing transfer duty exemption for first home buyers at $430,000 and re-introduce the $3,000 First Home Owners Grant for existing dwellings.
- Introduce a $10,000 concession on transfer duty for seniors over the age of 65 to encourage ‘right sizing’.
Stronger economic growth in Western Australia is predicted
The State Budget revealed that Western Australian economic growth is expected to recover from 0.25 per cent in 2016-17, to three per cent in 2017-18.
Employment growth is also forecast to recover, with nearly 20,000 jobs expected to be created in 2017-18, attributed to a modest increase in population growth.
(SOURCE: The Real Estate Conversation)
You might also be interested in
Aug 25, 2017
Young Aussies Say "Rentvesting" Is The Only Way To Get Property
Given the escalating cost of dwellings in Australia’s major cities, cash-strapped house-hunters are trying to find new ways of getting a foothold in the property ladder. New research from non-bank lender State Custodians Home Loans has found that 74 per cent of people now think rentvesting is a good strategy for those struggling to get into the market. A quarter of Gen Y — those aged 18 to 34 — who are struggling the most to buy a first home now feel that rentvesting is the best idea as it’s simply not possible to obtain property any other way. In the survey of 1,006 people nationwide, 33 per cent of all Australians polled across all ages say that they’re in favour of rentvesting, saying that it allows people to build equity and live where they want to, rather than living in a mortgaged house in an area they’re not keen on. Some 31 per cent like the idea that it allows them to get into the property market sooner, and 29 per cent say that it’s a good way of providing two income streams: rent from tenants and tax benefits. In particular, many Gen Y respondents feel that it's a good way of affording them the lifestyle they want. Around 26 per cent of Gen Y like that it allows them to live in a high-quality rental home, which would be out of their price range to buy, while raking in income from elsewhere. Additionally, 32 per cent of Gen Y feel that it leaves them with more disposable income to spend on other things. Lifestyle State Custodians general manager Joanna Pretty said that the question of lifestyle has become one of vital importance to young people in recent times. “More and more young people are choosing to rent in desirable, trendy areas to be close to work, friends and amenities,” she said. "In this lifestyle-focused era, a great rental in a fashionable area can be seen as a more desirable option than buying a place far from the action. However, while these areas provide a great lifestyle, they tend to be more expensive to both rent or buy, which creates a real dilemma when it comes to saving for a home.” The research also showed that both Gen Y (78 per cent) and Gen X (75 per cent) are more likely than traditionalists aged 65 plus (66 per cent) to think that rentvesting nowadays is a good idea. Additionally, while 26 per cent of Gen Y feel that it’s more desirable to live in a better-quality rental home than a worse-quality mortgaged home, only 19 per cent of Baby Boomers aged 50 to 64 feel the same way. Ms Pretty said that these attitudinal differences reflect how much Australian society has changed. “In previous generations, young couples settled down quicker and were eager to secure their first home as soon as possible, even if it was nothing flash. They were more prepared to buy properties and fix them up in areas that were not on their radar simply to secure a place. “However, young people are now settling down later in life and choosing to — or forced to — rent for longer periods in order to save up enough money for an initial deposit. “Or else they’re taking their time to consider their next move and focusing on other things like their career or travel, so they’re entering the market later.”
Sep 26, 2018
Tenant of the Month - August 2018
Congratulations to our tenant of the month for August! Thank you for your efforts :)