Saffioti takes aim at rate hike as housing takes centre stage in WA budget

West Australian Treasurer Rita Saffioti claims the government’s big spend on housing will not further inflate house prices, despite the housing crisis being firmly in the budget’s sights this year.

A total of $4.7 billion has been poured into housing, including $694 million for DevelopmentWA to create thousands of new lots across the state through the development of residential land.

However, when questioned whether a $297 million housing tax package including an increase in stamp duty concession and exemption thresholds would lead to house price inflation, Saffioti said the primary goal was increasing supply.

“It is really a range of new initiatives, so it is an additional investment in shared equity, we have additional investment in lifting the threshold for land,” she said.

“Many first-homebuyers are going into buying house-and-land packages.

“So if you look at the whole suite of initiatives, including concessions for buying off-the-plan, it is all about assisting first-home buyers.”

Saffioti also took aim at the Reserve Bank’s latest interest rate rise this week.

“I don’t believe Western Australians should have received an increase in the interest rate this week,” she said.

“What we’ve seen in relation to the cost of living is a price spike as a result of the Iran war.

“I think we need to give confidence to the Western Australian community and I think we need to support the West Australian community, that’s my big focus.”

Under the new housing incentives, first-home buyers will pay no stamp duty for newly built or established homes up to $600,000, a threshold increase of $100,000.

Stamp duty concessions will be available for homes up to $800,000 – that threshold is also increased by $100,000.

First-home buyers will pay no stamp duty for vacant land purchases up to $450,000, with reduced rates for homes up to $550,000.

The treasurer said the changes were expected to benefit more than 25,000 first-home buyers over the next four years.

“Our tax initiatives, or tax incentives, are very much about new supply,” Saffioti said.

“Getting that new supply out onto the market and making sure that we continue to increase the availability of rentals and houses to purchase.”

Residential land supply will also benefit from a $1.3 billion investment in land development and power, water, and other infrastructure.

The investment takes the state’s delivery pipeline to more than 9800 homes from July, 2021 to the end of June in 2030.

Saffioti said the most generous concessions were targeted at vacant land and off-the-plan developments.

The plan aims to alleviate potential price increases on established homes in an already rising market.

“If you look at the thresholds and the range of different initiatives, the biggest focus is in relation to vacant land and also to off-the-plan, apartments and other medium density,” she said.

“So we have balanced the need to continue to support first-home buyers who are out there in the established market, but our key focus and the initiatives we have announced today are primarily targeted at increasing supply.

“That’s why we have been so generous when it comes to vacant land, that’s a significant increase in that threshold and also why we have been very generous in relation to the off-the-plan stamp duty concessions because that is where we want to increase supply,”

The budget also includes more than $692 million to support housing supply in regional areas, including tripling the Regional Housing Support Fund from $25 million to $75 million, including $25 million from the Commonwealth.

More than 500 new dwellings will be delivered through the Seven Cities New Build program, while an $82 million top up has been promised for the Remote Communities Fund.