Western Australia investors hamstrung by property taxes
A recent REIWA survey of Western Australia's property seekers found 90 per cent of respondents consider state property taxes a barrier to owning or investing in property.
REIWA President Hayden Groves said the survey responses overwhelmingly illustrate state property taxes, like transfer duty, are a significant burden on home owners and investors.
“The first policy reform we are campaigning for is that the over-reliance on governments on property taxes must stop,” he said.
He also said the community has “had enough” of increases to state property taxes.
“The results from our first survey clearly show these taxes are a deterrent to would-be home owners,” Mr Groves said.
“Any move from the incoming government to further increase them would make home ownership and property investment less affordable and more difficult for West Aussies.”
The REIWA survey found significant benefit in leaving state property taxes unchanged, with 85 per cent of respondents saying they would consider buying their first or additional property if no increase to property taxes was guaranteed.
“It shouldn’t be underestimated the impact state property taxes have on the lives of West Australians. Any increase to taxes would see more people prevented from accommodating themselves in housing appropriate to their needs and circumstances,” Mr Groves said.
REIWA’s second policy reform proposes land tax aggregation rules be abolished. Respondents were asked if removing these rules would change their perception of property investment:
- 48 per cent said they would invest in more property if land tax aggregation rules were abolished
- 23 per cent said they would be more inclined to start investing in property
- 29 per cent said they would not change their investment decisions
Mr Groves said this suggests 71 per cent of respondents would choose property as an investment if aggregation rules were abolished.
“The knock-on effect this reform would have on the economy is compelling,” he said.
“REIWA scenario analysis shows in the forward years, a lift in sales activity from abolishing aggregation rules would generate more revenue for the state government from transfer duty and new land tax receipts, over the initial loss from abolishing land tax aggregation.
“The three years of consecutive increases in rates and changes to thresholds has made land tax aggregation rules a bigger financial burden for property owners, which is passed onto businesses around Western Australia affecting jobs and growth.”
The survey also asked respondents to explain what their biggest concerns and hurdles were to owning or investing in property.
The top three were transfer duty, land tax and capital gains tax, acquiring finance and savings, and the general cost of housing.