Formerly known as stamp duty, transfer duty is imposed on certain transactions over property, including transfers of real estate, with some exemptions such as the First Home Owner Rate.
According to the Department of Finance’s online calculator, the purchase of a $1 million home in November attracts an estimated transfer duty of $42,615.50.
Being a significant barrier for buyers, transfer duty lacks the stamp of approval from real estate experts.
Realmark Managing Director and Licensee John Percudani said the state’s rising property values had coincided with a rising transfer duty burden for property owners.
“The high cost of transfer duty is a major deterrent to selling,” he said.
“This incentive to hold also encourages a volatility to the flow of properties entering the market, which overconcentrates either a contraction or expansion phase in the property cycle.
“This is, especially, the case with a smaller market like the Perth metropolitan one.”
With sellers affected and experts feeling the market is restricted, there are – unsurprisingly – appeals for transfer duty reform, with some experts even suggesting a total removal of the system.
Mr Percudani also advocated for reform, saying the current transfer duty system is not a sustainable or healthy model.
“Its abolition in favour of a fairer arrangement would encourage more housing provision and exchange in WA, leading to a fairer market for all,” he said.
For the full article, see the Saturday 2 November edition of The West Real Estate.