The threshold for first home buyers to avoid stamp duty will be lifted for the first time in a decade, the State budget has revealed.
The changes, which also lift the concession threshold, will raise the first home buyer stamp duty threshold for established homes from $430,000 to $450,000.
It will mean a saving of an extra $3838 for a first home buyer of a $450K home and a total stamp duty saving of $15,390.
And first home buyers will get a concession for established homes to a value of up to $600K – up from $530K.
A first home buyer of a $530K property will pay just over $12K in duty – saving more than $7K.
Treasurer Rita Saffioti said Thursday, while revealing her first budget since she succeeded Mark McGowan, that modelling showed up to 5000 households would benefit.
“This is an important measure to assist first home buyers purchasing a home, especially given the growth in house prices since the property value thresholds for this scheme were last changed in 2014,” Ms Saffioti said.
The policy will cost State coffers an estimated $20M per year and apply to agreements entered into from May 9.
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The budget reveals the State is predicting median house prices to grow by 4.5 per cent in the next financial year, by to 2.5 per cent the year after, and 1.2 per cent the year after that.
The prediction – attributed in the budget papers to overseas migration easing and the supply of homes expanding as dwellings under construction are completed – is markedly more optimistic for buyers than that of bodies such as the Real Estate Institute WA, which recently forecasted a rise of up to 20 per cent this year.
REIWA has called for the stamp duty threshold to be linked to the average median house price.
The budget comes after a record 94,000 population growth last year contributed to a tight housing market and rental vacancies hitting a record low of 0.4 per cent – compared to between 2.5 and 3.5 per cent in a balanced market.
Ms Saffioti said while strong population supports the “economy, brings a workforce and keeps consumption strong” it also led to challenges in “housing and the cost of services”.
“We’re trying everything on all fronts, whether it’s building (houses) ourselves, encouraging the private sector to build them, training tradies to build them,” she said.
The changes to stamp duty are part of a $1.1B housing and homelessness package, with the Housing Minister John Carey announcing $843M to increase the supply of housing and $92.2M for homelessness services ahead of Thursday’s budget.
The Government has also announced $5000 payments for owners of empty homes to convert them into long-term rentals and $10k payments for short term rental operators, such as Airbnb owners, to put their holiday rentals on the long-term market.