REIWA chief executive warns against FHB stamp duty introduction

A continuining drop in first home buyer numbers has chief executive of the Real Estate Instute of Western Australia (REIWA), Neville Pozzi, warning the government not to introduced any stamp duty increases for first timers.

He said that this drop should come as a budget warning to the state government.

“Given that first home buyers are dropping in numbers, it’s critical that the Treasurer doesn’t bring back stamp duty for this segment of the market,” Pozzi said.

Currently, first home buyers in Western Australia are exempt from stamp duty payments for homes under $500,000.

“It’s very concerning, however, that Premier Barnett has indicated that the current tax break for first home buyers is under review and might be changed,” he said.

“The housing market is very susceptible to cost pressures and making first homes more expensive would be a terrible blow to the market just as it’s starting to stabilise,” he said.

FHOG applications for the March quarter, as recorded by the Office of State Revenue, recorded a 9% drop. This is 21% below the June 2013 peak.

This drop is across both the established and new-build sectors, with established homes dropping by 14%.

“This means that grants being paid out have now fallen below the average since the FHOG was first introduced 14 years ago,” he said.

He noted that the "last thing" the market needs at present is any added cost pressure on first time buyers.

The median purchase by first home buyers in March was $470,000 in Perth, and $350,000 in regional Western Australia.