West Australian Premier Colin Barnett has promised a $15,000 stamp duty discount for seniors who want to downsize — the nation’s most substantial concession of its type.
He has promised that if his Liberal party is re-elected it will provide the stamp duty discount for the purchase of new and established homes valued up to $750,000, as well as a concession of up to $10,000 for vacant lots up to $400,000.
This is a significant announcement for housing affordability because the high cost of stamp duty is widely regarded as a major force driving skyrocketing house prices.
By discounting the tax for seniors, they will be more incentivised to downsize, thus getting the supply chain moving.
“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,” Real Estate Institute of Western Australia (REIWA) President Hayden Groves said.
“The $15,000 concession the Government have committed to, which is capped at $750,000, will make a substantial difference to those seniors looking to ‘right size’ into more suitable accommodation, and will help address the issues of housing affordability, choice and livability.”
The Housing Industry Association (HIA) has also lauded the promise as groundbreaking for affordability.
“This policy is a masterstroke in the housing affordability debate,” John Gelavis, Executive Director of the HIA said.
“Western Australia’s population is ageing and increasingly we see Baby Boomers whose equity is locked up in their quarter acre block in the inner suburbs. The homes are ageing and the property is too much for them to maintain — but they don’t move as the cost of buying a smaller home nearby is significantly increased by stamp duty.”