Home buyers should have a choice about how they pay, industry body says
The Real Estate Institute of Western Australia is calling for the government to give home buyers a choice when it comes to paying stamp duty.
A survey conducted by REIWA found that 90% of respondents felt that stamp duty was a significant barrier to homeownership, leading the industry body to call for a two-stream method to collect the duty. Under the plan, home buyers would have a choice to pay the stamp duty upfront – as is currently mandatory – or opt for an ongoing annual payment.
REIWA President Damian Collins said giving buyers the option to pay over time would open homeownership to more people.
“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,” Collins said. “This additional cost is too big 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.”
Last year, New South Wales committed to a two-stream system, with the intention of initiating the new payment structure within the next two years.
A recent analysis by the NSW Treasury Department found that if stamp duty was removed and replaced with an annual tax, the annual volume of housing transactions could spike by 50%. Economist Ken Henry, who chaired Australia’s Future Tax System review in 2008, last week called stamp duty an “inefficient”, “inequitable” and “antiquated” system that penalised people who moved more often.
“It’s clear that reforming stamp duty would create positive outcomes for both buyers and government,” Collins said. “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.”
Sixty percent of respondents to REIWA’s survey said they would prefer to pay it over time 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,” Collins said.