This article is from the Australian Property Journal archive
WESTERN Australian seniors downsizing into a property valued up to $750,000 will get a stamp duty concession of $15,000 if the Barnett government is re-elected at the upcoming state election.
At the same time, Premier Colin Barnett also announced that from January 01, WA’s First Home Owner Grant Scheme will be boosted to $15,000, which is capped at $750,000 for house and land in all Perth metropolitan areas.
Barnett said the centrepiece of the seniors reform package will money for more than 4000 seniors aged over 65 years.
There would also be a duty concession of up to $10,000 for a vacant lot, valued at up to $400,000.
Under the plan, eligible seniors would pay no stamp duty on property worth up to $440,000 and the tax would be roughly halved on a property valued at $750,000. The initiative will also include a requirement for the eligible senior to sell their existing home.
“This concession is designed to provide maximum flexibility and support to seniors pursuing their downsizing options,” Barnett said. “I think it is important to support seniors in choosing housing that better suits their needs.”
The concession would be introduced for two years from the start of 2018.
The Real Estate Institute of Western Australia (REIWA) and Council on the Ageing (COTA) have both welcomed the announcement.
REIWA president Hayden Groves said transfer duty creates a significant barrier for seniors over 65 on fixed incomes who are looking to change their lifestyle or down size.
“The cost of transfer duty on a median house price of $520,000 is $18,715, which is almost equivalent to the entire annual standard aged pension of $20,745.40,” he pointed out.
COTA WA CEO Mark Teale said one in three voters in WA are over the age of 60 and seniors make up 19% of WA’s population.
“Our members, many of whom are on a fixed income, find the existing transfer duty arrangements to be a major barrier to ‘right sizing’, so this announcement is very positive news,” he added.
REIWA’s analysis estimates the policy reform would release 21,000 homes into the market.
“While the concession would cost the State Government $303 million from the 21,000 senior households ‘right sizing’, the resulting trade-up activity would generate additional transfer duty revenue in the order of $393 million, leaving a net surplus of $90 million.
“Even if a more conservative number of properties were released into the market, the difference in property values transacted will still provide a net gain for government coffers,” Groves said.
A recent REIWA survey found 92% of respondents said they would be more inclined to move house in their senior years if an exemption to transfer duty was introduced.
“We now call on Mark McGowan and the Labor party to commit to looking after our seniors, if elected to government, by legislating a transfer duty concession for West Australians aged over 60 on their primary residence,” Groves said.
Australian Property Journal
