Reports out this week that property taxes have already smashed Treasury's May budget forecasts, come as no surprise to the Real Estate Institute of Western Australia.Treasury forecasts predict that property-related tax collections will rake in a staggering.$2.04 billion from the 2005-06 financial year.This is up from $1.8 billion in previous estimates.REIWA president Greg Rossen said the announcement further vindicates the Institute's position that Western Australian homebuyers are grossly over taxed and that stamp duty in particular must be reined in.The extra $200 million would have funded REIWA's recommended reduction in rates to pre-2001 levels for a full three years and yet the Government failed to act."The recent State Tax Review strongly recommended reform of stamp duty on property purchases, but the Government ignored this advice," Mr Rossen said.Western Australians now pay more than $14,000 in stamp duty on the median priced home in Perth. Five years ago, the amount of stamp duty payable on a median priced home was around $4,500."While housing prices have doubled in the last five years, the rate of stamp duty payable on homes has accelerated much more rapidly than this and is now impacting heavily, especially on first homebuyers."Failure by the government to address bracket creep within the tax scales for stamp duty has pushed more than 50 per cent of homebuyers into the upper two quartiles of this tax regime," Mr Rossen said."With such a vast amount of money pouring in to state coffers from just 88,000 property purchasers, the Treasurer can afford to ease back this tax and adjust the tax brackets on conveyancing to more realistic and sustainable levels," Mr Rossen said.Mr Rossen said that while first homebuyers were exempt from stamp duty, this exemption was capped at homes valued at under $250,000."This is an unrealistic benchmark in the current market, and very few young people trying to buy their first home would find much around in this price range," Mr Rossen said.REIWA is again calling on the Treasurer to return stamp duty rates to 2001 levels, at modest cost to the Government at a time of record windfall revenue.
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