Property seekers have revealed that taxes are the biggest obstacle preventing them from owning or investing. A survey conducted by REIWA as part of its campaigning for the upcoming state election found that having the necessary savings to buy or invest was only of secondary concern. In the current climate, where REIWA is campaigning for the abolishment of land tax aggregation rules, could this finding help push its agenda to the forefront of the state government's priorities?
Land tax is payable annually to the WA state government on all the land held by the same owner. It's not designed with owners of multiple properties in mind. For example, using the WA government's land tax calculator, the total land tax payable on a single property worth $400,000 would be $440. However, if you own two properties that are together worth $800,000, you'd be up for a disproportionately hefty $1,950.
"Aggregation rules unfairly penalise investors from holding multiple properties, and it has the potential to impact the property market by softening buyer activity levels in commercial and residential markets," said REIWA President Hayden Groves.
WA property seekers agree. Of the 455 Australians surveyed, 23 per cent said that if land tax aggregation rules were abolished, they would start to invest in property. Almost half of the respondents (48 per cent) stated that they would invest in more properties.
"REIWA analysis shows by removing aggregation rules, there is the opportunity to stimulate activity in residential and commercial markets which would generate new transfer duty and land tax revenue for the state," Mr Groves stated.
The findings from REIWA's survey clearly indicate that land tax aggregation rules are a significant barrier to buying and investing in WA. Does this spell bad news for the property market in Bunbury after the state election in March?
Not necessarily. REIWA is making its voice heard loud and clear. It's unlikely that the WA government will choose to increase taxes in light of results of surveys such as this that clearly show that the property market will be negatively affected.
Plus, property prices in Bunbury have remained consistent over the past 12 months according to Realestate.com.au data – well under the median house prices in Perth. It's still an incredibly affordable place to buy or invest. Talk to the Ray White team about opportunities in one of WA's most liveable regions.