Stamp duty delay could distort market - Property Council

Delaying proposed cuts to stamp duty and other property taxes could cause distortions in Western Australia's property markets with home buyers delaying purchases, according to the Property Council of Australia (WA).

The full text of a Property Council announcement is pasted below

The Property Council of Australia has called on the State Government to immediately announce anticipated cuts to property taxes otherwise serious distortions will occur in WA's property markets.

Executive Director of the Property Council of Australia WA Division, Mr Joe Lenzo said recent media speculation of significant cuts to stamp duty on property purchases will influence the timing of property sales leading up to any official announcement of tax reforms.

"The Government has created uncertainty in property markets by flagging future tax reform without setting dates for the tax cuts. An early announcement by the Government on tax cuts is essential to ensure proper market activity is not disrupted.

"Home buyers and property investors will obviously weigh up the merits of delaying a transaction in order to save on stamp duty costs. This will cause serious disruptions in the property sector. Hardest hit will be sellers of property, particularly those who are planning to sell before trading into a new home.

"Commercial property markets will also be affected because stamp duty costs can involve several million dollars.

"It is particularly important that the Government announces an early date for the anticipated cuts to stamp duty on property purchases. It is irresponsible to expect the tax cuts to coincide with the next State Budget because property markets will effectively stall in the long lead-up to the tax cuts.

"The residential property market is slowing and the uncertainty caused by speculation over tax cuts will further depress markets. Governments have no role in manipulating property markets in this manner.

"An early announcement of cuts to stamp duty on property purchases will also assist in offsetting serious housing affordability problems in WA", said Mr Lenzo.