08/05/2014 - 14:09

Property sector slams 'lazy' budget

08/05/2014 - 14:09

Bookmark

Save articles for future reference.

The government appears to have reacted to pre-budget industry fears by declaring only modest cuts to new housing market entrants' stamp duty concessions, however it still earned the wrath of some industry players.

The property sector has lashed out at the state budget, calling cuts to first home buyer tax concessions and an increase in land tax charges lazy policy that will exacerbate housing affordability issues.

The budget featured two key changes to property sector taxes, with the price at which first time home buyers are exempt from stamp duty charges dropping from $500,000 to $430,000, and a 10 per cent hike in land tax charges.

Treasurer Mike Nahan said the changes would generate estimated savings of $334 million over four years.

The land tax impost is expected to translate to a $70 annual increase in charges on holders of undeveloped land worth more than $300,000.

The government claimed the new threshold for first home buyer stamp duty concessions better represented the value of houses being purchased by new entrants to the housing market.

The median price for a first home owners grant as of March this year was $470,000 in the metropolitan area and $350,000 in regional WA.

However Master Builders Association WA housing director Geoff Cooper slammed the changes, saying they would make housing affordability worse.

"This is the tax man putting his hands in the pockets of WA home buyers," Mr Cooper said.

"It does nothing to reduce costs of buying homes. But worse, it pushes up the costs of housing in WA, which is not in the interests of our community."

Property Council of Australia WA executive director Joe Lenzo was also scathing of the changes, saying slugging WA property owners for a second consecutive year was a “lazy” way to fix the state’s budget issues.

“This is a very disappointing budget that lacks any vision for reform to make the tax system fairer and more sustainable,” Mr Lenzo said.

“It is a bookkeeper’s budget for the short term that masks the structural faults in the state tax system and the government’s inability to rein in public expenditure.”

Real Estate Institute of WA chief executive Neville Pozzi last week said it was critical the state government did not remove the tax break for first-time buyers, pointing to a continued fall in activity in that market segment.

“It’s very concerning that Premier Barnett has indicated that the current tax break for first home buyers is under review and might be changed,” he said.

“The housing market is very susceptible to cost pressures, and making first homes more expensive would be a terrible blow to the market just as it’s starting to stabilise.”

Applications for the first home owners grant fell 9 per cent in the March quarter, to finish the period 21 per cent below the peak in June of last year, data from the Office of State Revenue showed.

Grants paid to applicants in the same period fell by 17 per cent, to 2,833, down 27 per cent from the June 2013 peak.

The government last year lifted the first home owners grant for new houses from $7,000 to $10,000, while cutting the grant for existing homes from $7,000 to $3,000.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options