The Real Estate Institute of Western Australia (REIWA) has called the McGowan government’s expected introduction of a new $270 levy for property investors “short sighted” and “irresponsible”.
State Treasurer Ben Wyatt confirmed that the proposed levy was under consideration ahead of his government’s first budget in September. REIWA said the levy will be linked to water rates and will apply to properties with a gross rental value of $24,000 or more.
Wyatt said the new levy was one of the many proposals that were put forward by the McGowan government to raise additional revenue to aid the cash-strapped budget.
REIWA councillor Suzanne Brown said it was extremely “disappointing” that the industry had not been consulted about the proposed policy change. She also said the levy would make property investment less attractive in Western Australia.
“The private rental market is crucial to the provision of rental accommodation in Western Australia,” she said. “This levy will only increase the cost of owning a rental property, and make it a less viable investment option”
Brown said the property investment market in WA was already struggling in a weak economy. “With vacancy rates sitting at an all-time high of 6.5 per cent, Western Australian investors are already doing it tough. Slapping them with an additional cost in an already soft market is a knee-jerk reaction that will do more harm than good”.
Brown said it’s possible landlords might pass on the cost of the levy to tenants in the form of higher rents. “Housing affordability is already a significant concern in Western Australia. Applying additional costs to the property market is not the answer and will only exacerbate the issue.”
Collections: Mortgage News