In a survey conducted by REIWA, 90 per cent of respondents considered stamp duty to be a significant barrier to home ownership, which is why the Institute is calling for every political candidate to commit to a two-stream revenue collection method for stamp duty.
Under a two-steam revenue collection method, home buyers would have the choice to pay the hefty tax upfront, as is currently mandatory, or opt for an ongoing annual payment.
REIWA President Damian Collins said providing buyers with a choice would open the door for more people to purchase a home.
“Stamp duty is a huge impost on buyers, adding a considerable amount of money to the savings required to qualify for a home loan, as well as thousands of extra dollars over the life of the loan. This additional cost is too big of a burden for many buyers, pushing their dream of home ownership out of reach.
“By introducing a two-stream revenue collection method, buyers would be able to decide for themselves which option is most beneficial, creating a more equitable taxation system,” Mr Collins said.
Last year, New South Wales committed to introducing a two-stream revenue collection method for stamp duty with the intention of initiating the new payment structure in the next two years.
WA needs to remain a desirable option for buyers
Recent analysis by the NSW Treasury Department also found that if stamp duty was removed and replaced with an annual tax, the annual volume of housing transactions would likely increase by 50 per cent.
Leading economist Ken Henry, who chaired Australia’s Future Tax System Review published in 2008, also came out last week labelling stamp duty an ‘inefficient’, ‘inequitable’ and ‘antiquated’ tax that penalised people who moved more often.
“It’s clear that reforming stamp duty would create positive outcomes for both buyers and government. REIWA has been calling on the WA Government to reform stamp duty in WA for years. Now that other states are taking action to lessen the financial burden of stamp duty, we need to act quickly to ensure WA remains a desirable option for home buyers,” Mr Collins said.
In addition to the 90 per cent who considered stamp duty a significant barrier to home ownership, 60 per cent of respondents in the survey indicated they would opt for an annual fee if given the choice.
“It’s time all political parties committed to reforming stamp duty to help deliver a fair, sustainable and prosperous property market for West Australians,” Mr Collins said.
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