Federal incentives required to help states and territories abolish stamp duty - REIWA

01 Apr 2019| Posted by: Donna Goddard

Source REIWA - REIWA is calling for all political parties contesting the federal election to commit to funding research to help assist each state and territory phase out stamp duty.

REIWA President Damian Collins said stamp duty was an inefficient tax and one of the biggest imposts to home ownership.

“While we recognise stamp duty reform needs to come at a state level, it does require assistance and support from the Federal Government. REIWA has long since advocated for the abolishment of stamp duty, recommending instead that WA move towards a broad-based land tax system.

“We’re calling for all federal political parties to commit to providing funding for states and territories to undertake a full feasibility study into how phasing out stamp duty could be achieved, if elected.

“Stamp duty is a significant hurdle for home buyers impacting greatly on housing affordability. Most buyers are not in a position to have surplus funds to cover the upfront cost of stamp duty. Instead, they are forced to borrow this amount on top of the loan amount, amortising the stamp duty cost across the whole life of their mortgage.

“Not only does this hinder affordability, it also impacts the ability for households to make appropriate housing decisions in accordance with their lifestyle choices, changing needs or economic reasons like employment,” Mr Collins said.

Transactional activity has declined significantly in Western Australia in recent years, with the number of annual property sales falling from over 71,000 in 2013 to less than 40,000 in 2018 – the lowest level of transactions since 1990.

“Significantly fewer property sale transactions has meant significantly less stamp duty revenue for the WA Government. By abolishing stamp duty altogether and implementing a broad-based land tax system, the cost of property taxes would be spread across many years creating a steady stream of reliable income for state and territory governments,” Mr Collins said.

“It would also remove the upfront financial burden from home buyers, helping to make home ownership a reality for more Australians.”

For more information about REIWA’s federal election campaign and to have your say, visit whataboutwa.com.au.