The real estate industry have issued their hopes from the 2018-19 budget, which will be released at approximately 7.30pm AEST on Tuesday May 8.
Affordability is one of the key topics for the REIA going into the next budget. While they praise the previous budget’s recognition of the issues, they don’t think the fixes have gone far enough.
REIA is calling on the government to take a leadership role in the approach of all levels of government to address property taxes. This includes a recommendation that negative gearing and capital gains tax on property investors stay in their current form until a more holistic approach has been identified.
The industry is also calling on the government to lead all states and territories into offering the same first home buyer assistance, regardless of whether the dwelling is new or established. Currently, each state and territory have differing levels of FHB assistance and the grants relate only to new homes or owner-built homes.
REIA would also like the budget to include an extension to the current First Home Super Saver (FHSS) Scheme to allow first home buyers to have access to their pre 1 July 2017 voluntary superannuation contributions, including earnings, for the purpose of raising a deposit for a home.
Finally, the REIA is calling for the appointment of a Minister for Property Services. This would establish a mechanism to ensure the availability of reliable data on housing demand and supply in order to formulate appropriate policies and to monitor their effectiveness.
The REIACT have confirmed their official stance is that of the REIA.
The REIWA is calling on the WA Government to not burden West Australians with unfair taxes, as a means of budget repair, following yet another disappointing GST carve up.
REIWA President Hayden Groves said while the Institute understands the WA Government is facing another difficult budget, relying on the property industry to prop up state finances will do very little to ease the state’s fiscal pressures.
“WA already has one of the highest rates of land tax in the country. Any further increases would deter much needed investment, driving up rent prices and pricing the most vulnerable out of the rental market.
“The property market has been weak for some time. We are beginning to see some green shoots of recovery, but increasing taxes could jeopardise WA’s economic bounce back.
“Access to affordable and appropriate housing is still one of the more challenging issues facing West Australians. Whether it be first home owners finding their feet in the market or seniors looking to right-size into more manageable accommodation, the WA budget should outline key reforms to open doors for those that need it most,” Mr Groves said.
In its pre-budget submission, REIWA has called on the State Government to introduce measures that will improve housing affordability for all West Australians including a reintroduction of the first home owner grant of $3,000 for established homes under $430,000.
The REIWA would also like the government to introduce a transfer duty concession for seniors ‘right-sizing’ and commit to no increases in property taxes or changes to thresholds.
“In the long term a complete tax review is needed to ensure taxes are being utilised as efficiently as possible. REIWA recommends a report into phasing out transfer duty in favour of a broader-based land Tax,” Mr Groves said.
Stamp duty brackets are the cry from REINSW for the 2018-19 budget, with President Leanne Pilkington saying the institute has continuously lobbied the NSW Government in an attempt to persuade them into addressing the effects of Stamp Duty bracket creep.
“However, to date, Government has chosen to ignore the damage these outdated tax rates are causing. By doing nothing the Government is simply profiteering at the expense of the consumer.
“The Government’s conduct in regard to this issue is nothing less than unconscionable”, Ms Pilkington said.
“The current NSW Transfer Duty brackets (other than the top bracket for residential land over $3 million) have been in place for more than 30 years.
“The Second Reading to the 1986 Bill which on enactment increased NSW Transfer Duty rates and introduced the current base thresholds included the following statement:
“The increased rates for conveyances only affect properties worth more than $300,000 and thus will not affect the average home purchaser”.
“The median house price in Sydney is now at $1,179,519*. This clearly shows that the Government is ignoring the market in which the current stamp duty rates were to apply.
“Last financial year more than $7.3 billion was collected in stamp duty and to February 2018 the Government has raised in excess of $4.7 billion, on par with the same amount collected in the first 8 months of that financial year.
“Importantly, there is empirical evidence available that supports that reducing stamp duty will create greater volumes of transactions which in turn generates more revenue for Government. This therefore is a win for the property consumer and a win for Government.
“It is completely disingenuous for Government to express sympathy for our first home buyers and other property consumers and then rip them off without dated stamp duty rates.
“The NSW Government needs to search for its conscience and act to fix these out dated stamp duty brackets,” Ms Pilkington said.
* REIA Real Estate Market Facts December quarter 2017
The REIV is already working with both sides of the government to try and find a solution to their main issue – land tax.
REIV CEO Gil King said, “Land tax remains a significant issue for our members and their clients.
“Victoria’s buoyant property market has resulted in significant land tax increases over the past few years. The REIV has met with both sides of politics to address the impact of land tax, not only on property owners but also on small businesses across the state.”
The REIV is recommending individual assessment of residential, commercial and industrial properties for the purposes of calculating land tax within Victoria. They would also like to see the tax levels revised, to prevent bracket creep.
The REIV does not support the move to annual land tax valuations, which will further increase land tax costs in rising markets, but they do support continued infrastructure investment, particularly road and rail services to rural and regional areas.
“Property taxes, including stamp duty, land tax and capital gains, need to be reduced for all buyers and vendors to ensure the attractiveness of investment in this state. It’s important to note that Victoria is one of the highest taxed states in regards to property and construction taxes,” said Mr King.