From The Property Tribune by Liam Wignell
- There are fears that federal and state policies are disincentivising foreign workers from coming into WA
- Foreign buyers are required to pay 7% more in stamp duty, and most are also required to pay a $13,200 FIRB application fee
- Comes as the rental vacancy rate in Perth is just 0.4%
Calls have been made for adjustments to housing and foreign taxes in order to facilitate the migration of overseas workers who want to make a long-term investment in Western Australia.
It is no surprise that WA is desperate for workers; the unemployment rate is just 3.5%, according to the Australian Bureau of Statistics (ABS).
However, a buyer’s agent said that there are fears that federal and state policies are disincentivising foreign workers from moving to WA.
Resolve Property Solutions’ Peter Gavalas said that he is fielding several enquires weekly from overseas workers that are interested in moving to WA and buying a home, but are put off by the taxes they need to pay, despite Perth’s relatively low median house price and solid outlook.
“The minute I tell them about the additional stamp duty that foreign buyers get charged and the Foreign Investment Review Board (FIRB) application fees, they’re shocked and often say they can’t afford to buy,” he said.
“Naturally, some decide to rent instead, but others give up on WA altogether and decide to migrate to another Australian state.”
Peter Gavalas, Resolve Property Solutions
Foreign buyers who purchase an owner-occupied property in WA need to pay an extra 7% in stamp duty, and also need apply to FIRB. The fee is $13,200 for a property valued between $75,000 and $1 million.
Therefore an overseas worker who purchases a $600,000 property will face an additional bill of $78,715. This consists of $23,515 in regular stamp duty, $42,000 in foreign buyer stamp duty charges and $13,200 in FIRB charges.
“I’d love to see the federal government show some more flexibility over FIRB, but it’s probably a bit much to expect them to change a national policy just for Western Australia,” Mr Gavalas said.
“However, stamp duty is a state tax, so the West Australian government can absolutely reduce or eliminate Foreign Transfer Duty.
“The easier we make it for overseas workers to move to WA, buy a home and invest in our state, the more people we’ll attract, which is crucial when every part of our economy is so desperate for workers.”
Buy rather than rent
Mr Gavalas noted that giving migrants the opportunity to buy rather than rent will help alleviate the rental crisis, especially given the low vacancy rate in Perth of 0.4%, as shown in the below SQM Research chart.
“With only four out of every 1,000 rental properties lying vacant right now, the last thing we want to do is increase tenant competition,” he said.
The push comes as the West Australian government announced temporary changes to its migration program in a bid to ensure that “WA is the state of choice for skilled workers migrating to Australia”.
The changes included waiving the $200 application fee, halving the minimum employment contract required to six months and reducing the requirement needed to demonstrate sufficient funds.
It also comes after Western Australia was redesignated as a regional area for migration purposes.