2017 Budget focus on housing affordability welcome news for Western Australia

The Real Estate Institute of Western Australia said the 2017 Budget saw the need to improve housing affordability and address supply constraints as well retain negative gearing and Capital Gains Tax (CGT) arrangements for property investors.

Hayden Groves, president, REIWA said the emphasis on housing affordability is long overdue, and he is pleased the Government is driving policy to improve housing outcomes, by helping first home buyers salary sacrifice a proportion of their pre-tax income.

"The Budget also encourages senior Australians over 65 to down size by making a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home," he said.

“While we’re pleased the Turnbull Government have recognised the need to assist Australian seniors with housing affordability, more still needs to be done.

"REIWA will continue to advocate for reform to transfer duty, specifically a $10,000 concession for seniors to ‘right size.

The wins for small business owners included:

• Small businesses with a turnover of up to $10 million will continue to be able to immediately write off expenditure up to $20,000 for a further year.
• The Federal Government will take further action to reward States and Territories that cut red tape costs for small businesses.

"Most of our members are small business owners and these initiatives by the Federal Government will be a welcome relief to them given the challenging market conditions the industry is currently facing.

"although there were many positives for the WA real estate industry in the Budget, the Institute was disappointed the Government has chosen to slug foreign investors with a $5,000 levy if they fail to occupy or lease their property for at least six months each year.

"Additionally, the 2017-18 Budget prevents developers from selling more than 50 percent of new developments to foreign investors.

“Foreign investment in WA represents a very small proportion of our local market. These policies will only further dampen an already subdued housing market and deter foreigners who are not permanent residents to locate and live in WA."