- RIEWA is pushing for a two-stream model model
- Argues current levels of stamp duty push home ownership out of reach for many
- New South Wales intends to introduce a model within the next two years
In a survey conducted by the Real Estate Institute of Western Australia (REIWA), 90% of those who participated cite stamp duty as a ‘significant barrier’ to achieving homeownership, sparking calls from REIWA to introduce a two-stream system for stamp duty.
Under the proposal, homebuyers could opt for the current upfront payment – although there are exceptions, most notably for first home buyers under a certain threshold – or pay an ongoing annual payment.
In the same survey, 60% said they would opt for an annual fee.
New South Wales, which has committed to rolling in a two-stream model within the next two years, believes the replacement of the duty with the annual tax would increase housing transactions by 50%.
Dr Ken Henry, who chaired Australia’s Future Tax System Review back in 2008, has labelled the tax as ‘inefficient’, ‘inequitable’ and ‘antiquate’. He also remarked that the tax penalised who moved more often – younger generations are more likely to change jobs, therefore there is a greater chance they will move houses frequently.
“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 homeownership out of reach,” said Mr Collins.
“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 argues reform in the area would result in good outcomes for both buyers and government. As other states have already started the action on reform, he stresses WA needs to deal with the issue soon to avoid the state becoming less desirable for buyers if the duty remains.
“It’s time all political parties committed to reforming stamp duty to help deliver a fair, sustainable and prosperous property market for West Australians.”