The State Budget was handed down a couple of weeks ago and it caused a bit of a stir in the property industry. Just in case you haven’t heard or had time to digest all the information, here are the most important points relating to property owners.
Land tax will be increased to 12.5% in 2013-2014 to offset lower-than-expected land values and generate an additional 5% in forecast land tax revenue.
According to the Real Estate Institute of Western Australia (REIWA), this increase will “pull an extra $73 million out of property owners’ pockets”. While the government suggests that the majority of taxpayers will experience a “modest increase in their land tax bills”, many industry experts have called this a slap in the face to investment property owners who are already dealing with increased local council and water rates, as well as acting on changes to the Residential Tenancies Act. Rentwest Director Suzanne Brown echoes the concern: “It is extremely disappointing that the State Government has once again placed further burden on investors who are providing necessary accommodation for the Perth rental market. REIWA have lobbied extensively for several years for land tax to be abolished.”
Allocation for affordable homes.
The State Budget has allocated $130 million for the building of 500 affordable homes over the next three years. The new homes, which will be built on existing Department of Housing land, will be sold for around $270,000, with 50 per cent being sold under the State Government’s Shared Equity program, Keystart.
The remaining 50 per cent will be sold on the open market, which presents an interesting opportunity for residential property investors looking to buy a home in WA. We’ll be keeping an eye on this project and will update owners as to its progress.