Low interest rates and a stable pandemic environment means Western Australia is experiencing one of the strongest real estate markets in the country.
But, according to Jones and Co director Kelly Jones, the market could be even more buoyant if the stamp duty barriers weren’t so prohibitive.
“We meet many locals who would appreciate the chance to upsize or downsize but can’t afford to because of the significant cost of stamp duty,” she said. “The current system is over a century old and everyone knows it is in desperate need of a major overhaul.”
Kelly said there were a significant number of properties on the market that would become instantly more affordable if stamp duty wasn’t such an encumbrance.
In NSW, the State Government has started a public consultation process to seek the community’s view on tax reform to reduce the upfront cost for property buyers.
The proposed changes to stamp duty would see buyers able to choose whether to pay the stamp duty upfront or opt into a new model that would see them pay a small annual fee for the life of ownership of the property.
NSW expects to begin the process of strategic stamp duty reform as early as the middle of next year.
The Real Estate Institute of WA has repeatedly called on the State Government to consider stamp duty be replaced with a more efficient broad-based land tax.
But Premier Mark McGowan has consistently rejected such a move.
When new Liberal leader Zak Kirkup was asked about changes to stamp duty, he hinted his election policies would commit to broader economic reform.
REIWA recently undertook initial economic modelling on the potential impact that a broad-based tax system would have in place of stamp duty, as well as a targeted approach aimed at seniors and first home buyers before being rolled out universally.
Specifically, what this means is, by introducing a broad-based tax system, payments will be made over a longer period, allowing those who need to move, the ability to do so. Having an opt-in model only on new transactions will mean that those who have paid stamp duty are not unduly hit by the replacement tax.
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