10/05/2024
State Budget offers welcome support for first home buyers
REIWA welcomes the measures to support housing supply and affordability announced in the Cook Government's first budget today.
While there is no silver bullet to addressing the challenges WA’s housing market faces, we welcome the fact the Government has opted for incentives to boost housing supply, rather than punitive measures such as new taxes as we’ve seen in other states.
The fundamentals of the WA economy remain strong with the Treasurer forecasting the state is on track to reach 3 million people next financial year – this will drive ongoing demand for housing and see house prices continue to climb.
We were particularly pleased to see changes to the property price thresholds for first home buyer stamp duty exemptions to better reflect the current market conditions, which was a proposal in REIWA’s Budget submission.
WA has seen strong property price growth over recent years, which we expect to continue – however this has meant that first home buyers are not only having to pay more, but that they haven’t been able to access the stamp duty concessions which exempted purchasers from paying stamp duty on properties worth $430,000 or less, with tiered concessions on properties up to $530,000.
Under the changes, first home buyers will now pay no transfer duty on homes valued up to $450,000. The threshold was previously $430,000. They will pay a concessional rate on purchases over $450,000 to $600,000. Previously the concession ceased at $530,000.
This is the first time the thresholds have been amended since July 2014 so lifting the thresholds is a welcome change to support first home buyers in WA.
The changes will apply to agreements entered into from today, 9 May 2024 and are expected to benefit up to 5,000 first home buyers each year.
The thresholds for purchases of vacant land remain unchanged.
Funding for rental reforms REIWA’s Budget submission also called for funding for the new dispute resolution process, announced as part of the changes to the Residential Tenancies Act. The dispute resolution process was a key part of the reforms to ensure a more streamlined dispute resolution process.
We highlighted the importance of ensuring adequate funding to support the change and so welcome the allocation of $3.3 million in 2024-25 and ongoing funding in following years.
Housing supply
The Budget also included a range of previously announced measures to boost housing supply.
This week the Government announced the Vacant Property Rental Incentive Scheme, providing $5,000 to owners of vacant properties who make their property available as a long-term rental.
The successful Short-Term Rental Accommodation (STRA) Incentive Scheme, which has provided rental homes for 150 households so far, has also been extended.
Both initiatives will help put a roof over more families' heads by incentivizing property owners to participate in the long-term rental market, rather than introducing punitive measures such as vacancy taxes or levies on properties offered on the short-stay market as we’ve seen elsewhere.
The Budget also addressed new home construction, allocating $85 million for training initiatives.
$34.8 million has also been provided to unlock regional development-ready land for new housing in Broome, Karratha and Kalgoorlie, Social housing and homelessness.
The Government has invested an additional $400 million to expand the Social and Affordable Housing Investment Fund to deliver another 1,000 social homes.
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