The Real Estate Institute of Western Australia (REIWA) has warmly received the WA Government’s recent efforts to augment the housing supply. In an era where housing availability and diversity are paramount, these changes are both timely and necessary.
The Duties Amendment Bill’s Introduction
REIWA CEO, Cath Hart, recently expressed her appreciation for the introduction of the Duties Amendment Bill to Parliament. This Bill signals pivotal changes in the housing sector, namely:
- Extension of the off-the-plan duty scheme: Initially set to culminate in October 2023, the scheme has now been extended to June 2025. The Government has earmarked a generous $33 million towards this cause.
- Shift from rebate to concession: Buyers will no longer have to wait until settlement to receive their rebate. Instead, they’ll get an immediate discount, simplifying and hastening the process.
- Threshold Alterations: The Bill offers a full concession on properties priced up to $650,000, an increase from the former $500,000 threshold. As the property value rises from $650,000, the concession reduces, hitting 50% for homes priced at $750,000. For properties priced over $750,000 (previously capped at $600,000), a 50% concession will apply, with a maximum limit of $50,000.
“These reforms not only bring significant financial relief to prospective buyers but also galvanize the development of off-the-plan projects,” Ms. Hart pointed out. By boosting housing variety and supply, the Bill is setting the stage for more individuals to become homeowners. It also helps bridge the yawning gap in the rental market.
Foreign Developers – An Expanded Scope
Another salient feature of this Bill is its pro-active approach towards foreign developers. The existing rules permitted foreign developers to claim a refund of the 7% foreign buyers duty, but only when they acquired vacant land intending to construct 10 or more residences.
However, the new Bill loosens this stipulation. As Ms. Hart elucidated, “The amendments will erase the necessity for the land to be unoccupied, paving the way for an influx of new development opportunities.” This is a crucial step, ensuring that foreign developers have more avenues and less bureaucratic red tape, thus fueling the housing supply further.
The housing sector often reflects a nation’s economic health and social well-being. The WA Government’s new Bill is a testament to their commitment to addressing housing shortages, promoting diversity, and ensuring that both domestic and foreign developers play a pivotal role in shaping the market’s future. As more homes become available for purchase or rent, the overall ecosystem benefits, creating a more inclusive and prosperous society.