From The Real Estate Conversation.
The Real Estate Institute of Western Australia has called the government’s expected introduction of a $270 levy for property investors “short sighted” and “irresponsible”.
Details of the levy have not yet been formalised by the Government, but the REIWA understands the levy will be linked to water rates and will apply to properties with a gross rental value of $24,000 or more.
The levy is being considered as a means to raise cash for the troubled state budget.
REIWA Councillor Suzanne Brown said it was extremely disappointing the industry was not consulted about the speculated policy change, and said a levy will make property investment less attractive in Western Australia.
“The private rental market is crucial to the provision of rental accommodation in Western Australia,” she said. “This levy will only increase the cost of owning a rental property, and make it a less viable investment option.”
Brown said the property investment market in the state is already struggling in a weak economy.
“With vacancy rates sitting at an all-time high of 6.5 per cent, Western Australian investors are already doing it tough,” she said.
“Slapping them with an additional cost in an already soft market is a knee-jerk reaction that will do more harm than good,” said Brown.
“The government should be cautious of targeting property investors,” said Brown, as landlords may pass on the levy to tenants in the form of higher rents.
“Not only will it affect owners, but this has the potential to hit tenants if the cost of the levy is passed on,” she said.
“Housing affordability is already a significant concern in Western Australia. Applying additional costs to the property market is not the answer and will only exacerbate the issue,” Brown concluded.
