A recent survey conducted by the Real Estate Institute of Western Australia (REIWA) found that 90% of respondents consider state property taxes to be a barrier to owning or investing in property.
Hayden Groves, president of REIWA, said the survey responses make it clear that state property taxes, like transfer duty, place a significant burden on homeowners and investors.
“The first policy reform we are campaigning for is that the over-reliance [of] governments on property taxes must stop,” he said. “The results from our first survey clearly show these taxes are a deterrent to would-be home owners.”
Groves further emphasised that any move from the incoming government to further increase property taxes would make homeownership and property investment less affordable and more difficult for West Australians.
In the weeks leading up to the state election, REIWA campaigned to place property issues firmly on the political agenda. REIWA polled property seekers about the impact state property taxes, such as transfer duty, had on affordability and mobility. The organisation also asked respondents about the impact land tax aggregation rules had on their property investment decisions.
The survey found that 23% of respondents would start investing in property if land tax aggregation rules were abolished. An overwhelming 85% of respondents would invest in property if property taxes did not increase, and nearly half (48%) would invest in additional properties if land tax aggregation rules were abolished.
“It shouldn’t be underestimated the impact state property taxes have on the lives of West Australians. Any increase to taxes would see more people prevented from accommodating themselves in housing appropriate to their needs and circumstances,” Groves said.
Respondents also listed the following as their biggest concerns/hurdles to owning or investing in property:
- Settling taxes such as transfer duty and capital gains tax
- Acquiring finances or savings to bankroll investments
- Meeting the cost of housing
REIWA’s second policy reform proposes that land tax aggregation rules be abolished.
“The knock-on effect this reform would have on the economy is compelling,” Groves said. “REIWA scenario analysis shows in the forward years, a lift in sales activity from abolishing aggregation rules would generate more revenue for the state government from transfer duty and new land tax receipts, over the initial loss from abolishing land tax aggregation.”
Collections: Mortgage News