REIWA has expressed disappointment that the Federal and State Government’s building bonus schemes failed to address the biggest impediment to job creation and hurts those who can afford it least.
REIWA President Damian Collins said the Institute understands that HomeBuilder and the WA Building Bonus Scheme are aimed at providing short-term jobs at a crucial time, however both the Federal and State Governments have missed an ideal opportunity to undertake critical tax reform.
“While the scheme will create short-term jobs and help people get into homes in WA, the remaining 99 per cent of West Australians who won’t get to utilise the scheme, are still potentially lumbered with stamp duty if they want to buy a property,” Mr Collins said.
He went on to note that WA’s state package was better than the federal scheme as it was available to more people, but still it failed to address the barriers to moving that many people encounter.
“Numerous studies have shown that removal of stamp duty creates significant economic activity and the benefit to the WA economy could be as much as $1 billion per annum,” Mr Collins said.
“While the scheme will have a short-term boost to the economy, post 31 December 2020 we will be back in the same position, with stamp duty blocking upwards of a billion dollars of activity and thousands of jobs annually.
“With Victoria and New South Wales focused on getting rid of stamp duty, there has never been a better time for WA to also consider its removal to help boost jobs and the economy.”
The impact of the building boost schemes is unlikely to have much effect on most of the established market, and Mr Collins reflected it was likely to hurt those who could afford it least.
“Perth outer suburbs such as Ellenbrook and Baldivis suffered the most during the downturn, with many people who purchased house-and-land packages in these areas now in negative equity and suffering mortgage stress.
“Just when things were picking back up, home sellers in the outer suburban areas will find themselves potentially at another $45,000 disadvantage compared to a new build.
“This could have serious ramifications for their financial position and at the very least, the State Government should consider providing stamp duty relief in the short-term for buyers in these suburbs, so that the financial impact is minimised.”
REIWA will continue to call for the introduction of initiatives that will create jobs and make the housing market more accessible for all West Australians.
