Off-the-plan rebate scheme holds a range of benefits to buyers and renters
In the McGowan Government’s recent State Budget, an extension of the current Off-the-plan Duty Rebate Scheme was granted for a further two years.
This scheme provides a rebate to owner-occupiers and investors who enter into a pre-construction contract between October 23, 2019 and October 24, 2023 (inclusive) to purchase a new residential unit or apartment, or a contract signed between June 4, 2020 to December 31, 2020 to purchase a new unit or apartment already under construction.
The rebate is a good incentive for buyers looking to invest in the apartment market in Western Australia, helps to stimulate jobs in construction and also ensures the industry is delivering a diversity of housing to the market.
In fact, one of UDIA WA’s primary budget submission recommendations in the lead up to budget day was the extension of the rebate scheme for off-the-plan units and apartments to deliver greater housing choice to buyers.
Originally, the rebate was 75 per cent of transfer duty for off-the-plan purchases up to $50,000 – only available to October 23, 2021. Now, the extension has been reduced to a 50 per cent rebate available to October 24, 2023.
Along with promoting the delivery of a greater range of housing stock, particularly medium and high-density, the scheme is also critical to attracting investors back into the WA market.
The loss of investors in WA has negatively impacted all segments within the Perth property market, however it has disproportionately affected built form developers who are heavily reliant on presales in order to commence projects.
Australian Bureau of Statistics data shows that property investor finance fell 75 per cent in five years from an average monthly loan commitment of $889 million in 2014-15, to just $218 million in the 2019-20 financial year.
This has led to a lack of supply which, coupled with significantly increased housing demand, drove the rental vacancy rate to historically low levels.
The scheme has been demonstrably successful in getting more new apartment projects off the ground and creating jobs in the last year, and we hope that continuing the scheme will have a positive impact on rental availability moving forward.
Increasing the supply of apartments in Perth has a range of benefits, as I have mentioned – no least the fact that apartments can assist many older households to age in place and support them to transition from a house into an apartment, freeing up desperately needed family housing stock in centrally located areas.
Get the latest news from thewest.com.au in your inbox.
Sign up for our emails