The move by the WA government to extend stamp duty relief on apartments that are under construction is a step in the right direction according to the industry.
The WA state government recently announced that they will extend the current off-the-plan transfer duty concession, which previously applied to off-the-plan apartments that had not yet broken ground.
The change will mean that projects that are in the process of being built are eligible for the stamp duty reduction, which will cost the government approximately $13.9 million.
Real Estate Institute of Western Australia President (REIWA) CEO Cath Hart said the industry welcomed the move.
“These changes represent significant savings for buyers – over $18,000 for someone purchasing a $650,000 apartment – and will encourage off-the plan purchases, facilitating development of these projects,” Ms Hart said.
“With housing supply the greatest challenge facing the market at the moment any action to address the shortage of homes and provide greater housing diversity is to be commended.”
Under the stamp duty concessions, buyers who purchase an apartment that is under construction will receive a transfer duty concession of up to 75 per cent of the concession currently available for off-the-plan purchases, capped at $50,000.
The full 75 per cent concession is available on properties valued up to $650,000.
While a sliding scale between 75 per cent and 37.5 per cent will be applied to properties valued between $650,000 and $750,000.
And a 37.5 per cent concession for properties valued at $750,000 or more.
The reduced fees are available for properties under construction that are purchased between 31 August 2023 to 30 June 2025.
CEO of LJ Hooker City Residential & Mandurah, Rebecca Halton said she thinks the measures will definitely help.
“The apartment market has definitely been saturated for quite some time but we have already seen an increase with buyer activity on newer apartments,” Ms Halton said.
She said it will likely make the market more competitive given the level of supply.
“It will probably encourage more purchases, but hopefully it also encourages more developments, because WA stock is at an all time low,” she said.
“We have 5,000 homes on the market where a normal market for us is 13,000 so it’s already as tight as it can get.”
“There’s still a big shortage of housing and with the number of people moving to the state and to Australia conditions are tight.”
Premier Roger Cook said the government supports measures to increase the supply of housing in the state.
“Right across the country we are seeing significant pressure on our housing markets – and the best way to tackle the issue is to bring more housing online,” Mr Cook said.
“Our Infrastructure Development Fund will help to deliver thousands of additional new apartments into the market.
“These initiatives will help home buyers get into apartments, bringing down the cost of purchasing a new apartment.”