Big conversations are happening at the national level that could reshape how we buy and sell property in Western Australia. The Real Estate Institute of Western Australia (REIWA) is leading a strong push for major tax reform, urging the Federal Government to tackle one of the biggest hurdles in property: stamp duty.

Here’s a breakdown of what’s being proposed and what it could mean for homeowners, buyers, and investors across WA.

Why Stamp Duty is in the Crosshairs

For years, many have seen stamp duty as a major roadblock in the property market. REIWA’s President, Suzanne Brown, recently described it as a “tax on moving” that holds our economy back.

So, what’s the problem? Stamp duty can:

  • Discourage Moving: The hefty upfront cost can stop people from taking a new job in a different area or downsizing to a more suitable home in retirement.
  • Impact Labour Mobility: It makes it harder for people to move closer to work, leading to longer commutes and increased traffic. This also affects businesses that can’t attract the best talent because potential employees are reluctant to relocate.
  • Hinder Business Growth: Companies may delay moving to a better-located or larger premise to avoid the significant stamp duty cost, limiting their growth and ability to create jobs.

Essentially, it creates an inefficient property market where people stay in homes that no longer suit their needs simply to avoid the tax.

The Proposed Solution: A Broad-Based Land Tax

REIWA is advocating for a bold solution: replace the one-off stamp duty payment with a smaller, ongoing annual land tax.

The idea is that a transition to a broad-based land tax would unlock significant economic benefits. Proponents argue it would lead to:

  • Easier Movement: Homeowners could move freely to properties that better suit their lifestyle and career needs without facing a massive tax bill.
  • More Productive Land Use: It would encourage the development and use of land in a more efficient way.
  • Increased Investment: Businesses would be more willing to purchase new properties and expand their operations.

While property taxes are a state issue, REIWA is calling on the Federal Government to incentivise the change, arguing that the economic consequences are national. By providing financial support, the Commonwealth could help states like WA transition to this more modern and efficient system.

A Key Message for Investors: Keep Negative Gearing & CGT Unchanged 📈

While pushing for stamp duty reform, REIWA has sent an equally strong message about investment-related taxes: leave negative gearing and capital gains tax (CGT) alone.

With WA in the grips of a severe rental crisis, maintaining a stable environment for property investors is crucial. The rental market provides essential housing and supports labour mobility, especially in regional areas where businesses are struggling to find accommodation for workers.

REIWA points to recent history, noting that legislative changes during the pandemic saw nearly 20,000 rental properties leave the market as investors sold up. A recent survey highlighted this sensitivity:

  • 83% of investors said changes to property taxes would influence their decision to sell.
  • 82% of potential investors said tax changes would deter them from buying.

The message is clear: rocking the boat with changes to negative gearing or CGT could scare off investors, shrink the rental pool even further, and make the current rental crisis much worse.

What This Means for You

  • For Homebuyers & Sellers: Scrapping stamp duty would be a game-changer. It would remove a huge upfront cost, making it significantly easier and cheaper to buy your next home, upgrade, or downsize.
  • For Investors: The industry is fighting to protect your interests. Stability in negative gearing and CGT is essential for ensuring your investment remains viable and for encouraging the supply of rental properties that WA desperately needs.

This is a developing conversation, but one we’ll be watching closely. True reform could inject new life and fairness into the WA property market for everyone. 🏡

Contact us today to learn more!