Boosting Housing Supply: WA Introduces Off-the-Plan Concession and Foreign Persons Exemptions Bill

In: Housing

The Western Australian housing market is set to experience a significant boost as the state government introduces the Duties Amendment (Off-the-Plan Concession and Foreign Persons Exemptions) Bill 2023. This legislation aims to enhance housing supply, incentivize off-the-plan property purchases, and promote urban infill. Here's an overview of what the Bill entails and how it could impact potential homebuyers.

Simplifying Off-the-Plan Purchases

In an effort to streamline the process of purchasing off-the-plan apartments in multi-storey developments, the Duties Amendment Bill proposes a simplified approach to transfer duty support. Currently, buyers pay the full duty upfront and later receive a rebate after settlement. The new approach involves an upfront concession on the duty payable, reducing the financial burden on purchasers.

Expanded Concession Thresholds

One of the standout features of the Bill is the expansion of concession thresholds, designed to make the off-the-plan concession accessible to a wider range of buyers and further stimulate the housing supply. The following changes to the concession thresholds will take effect for eligible contracts signed on or after May 11, 2023:

  • A 100% concession (capped at $50,000) for properties valued up to $650,000 (formerly $500,000).
  • A concession phasing down to 50% of the duty (capped at $50,000) for properties valued at $750,000 or more (formerly $600,000).

Government Investment and Extended Timeline

The state government is fully committed to supporting the growth of the housing market. A $33 million allocation in the 2023-24 WA Budget has been earmarked to extend the off-the-plan transfer duty rebate and elevate the concession thresholds. Moreover, the Bill ensures the sustainability of these measures by extending the current scheme's expiration date from October 24, 2023, to June 30, 2025.

Foreign Buyers Exemptions

The Duties Amendment Bill also addresses foreign buyers' exemptions, aiming to eliminate restrictions on the type of land eligible for a refund of foreign buyers' duty if it's acquired for residential development. This move is expected to attract foreign investment, further contributing to the growth of the housing market. Importantly, the foreign buyer's duty amendments will be applied retrospectively from January 1, 2023.

In Conclusion

The introduction of the Duties Amendment (Off-the-Plan Concession and Foreign Persons Exemptions) Bill 2023 marks a significant step toward expanding the housing supply, promoting off-the-plan purchases, and encouraging urban infill in Western Australia. The proposed changes, including simplified processes, expanded concession thresholds, and foreign buyers exemptions, reflect the government's commitment to fostering a dynamic and thriving housing market. As the legislation takes effect, potential homebuyers and real estate enthusiasts can anticipate a more favourable environment for property transactions.

Source: "Duties Amendment (Off-the-Plan Concession and Foreign Persons Exemptions) Bill 2023," Parliament of Western Australia, August 9, 2023.

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Tags: Housing

Written by Ideas Group

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