Stamp Duty Reform Overlooks Key Downsizer Concerns in WA Housing Debate
The issue of stamp duty reform has resurfaced in Western Australia's political landscape, with renewed calls to reduce this tax to tackle the state's severe housing shortage. As the May State Budget approaches, the WA Liberal Party is advocating for a 20 per cent cut in stamp duty, a move championed by Shadow Minister for Housing Sandra Brewer to increase housing supply.
Proposals and Incentives for Downsizing
Among the various reform ideas being discussed, the Real Estate Institute of Western Australia (REIWA) has suggested a $10,000 downsizing concession aimed at encouraging seniors to vacate large family homes they no longer need. This proposal is based on the logical premise that baby boomers often occupy spacious properties while younger generations struggle to find suitable housing. A financial incentive could theoretically prompt seniors to move, thereby freeing up housing stock and simultaneously creating demand for apartments.
Complex Motivations Beyond Financial Incentives
However, conversations with potential downsizers reveal that their motivations are far more complex than simple financial gains. While a $10,000 stamp duty concession is appreciated, it rarely ranks as the top concern for individuals considering leaving their long-term family homes. More pressing questions dominate their decision-making process, such as where they would relocate to, whether they can remain in their current suburb near friends and family, and if an apartment will meet their lifestyle expectations.
Most downsizers are not looking to compromise after decades in family homes; they seek different housing options, not lesser ones. This distinction is crucial and often overlooked in policy discussions. The evidence suggests there may be a gap in Perth's housing diversity, as seniors frequently desire two-bedroom apartments with ample space, quality fixtures, proper storage, and outdoor areas. They value low maintenance but not at the expense of their lifestyle, and location is paramount, with many preferring established communities over Perth CBD towers or new suburbs.
The Role of Housing Supply and Market Gaps
When suitable apartments exist in desirable locations, downsizers are likely to move regardless of stamp duty settings. Conversely, when such options are unavailable, financial incentives cannot artificially create demand for housing types that fail to meet their needs. This highlights that government incentives, while helpful in reducing transaction costs and removing barriers, cannot substitute for sufficient housing supply in locations where people genuinely want to live.
Financial incentives might provide the final nudge, but the availability of the right apartment in the right location provides the fundamental reason to move. Perth's housing shortage demands comprehensive supply responses across all segments, and understanding and catering to downsizers represents a viable pathway to increasing stock while addressing genuine market demand.
