Would-be WA apartment buyers already facing uncertainty over when they will be able to move into their homes have been hit with stamp duty bills for tens of thousands of dollars.
RevenueWA’s automated system has sent out hundreds of notices to buyers already suffering because they have little idea of when they will get keys to their apartment homes.
Australian Apartment Advocacy CEO Samantha Reece says RevenueWA’s system was triggered by a three-year build assumption. However, long delays for projects such as Civic Heart and Shenton Quarter have created a scenario where some would-be apartment dwellers, already worried about delays to their move-in dates, have now received stamp duty bills for $30,000 or more.
Ms Reece wrote to the Minister for Finance and Commerce Sue Ellery, who has oversight of consumer protection, asking the State Government to intervene.
“These owners have already paid a deposit of $70,000 to $100,000 for their apartment,” Ms Reece says. “To now receive a stamp duty bill for an apartment that is still under construction has further diminished their confidence. This is poor timing by RevenueWA.
“These home buyers are under significant financial pressure, and this really is the final straw.
“Many purchased-off-the plan in 2019 and still do not know when their apartment will be finished.”
However, the news received by Minister Ellery this week is not positive with the advice stating:
"A buyer whose contract has not settled by the time duty is payable has the option of paying the duty when it is due or entering a payment arrangement, subject to interest at the
prescribed rate of 11.7 per cent per annum."
"The Commissioner has a discretion to reduce the interest rate and will consider a reduction if the buyer establishes there are good reasons for doing so.
"If a transaction does not proceed, the buyer can apply to cancel the transfer duty liability.
If this occurs interest accrued on the payment arrangement will be remitted in full and any
duty paid will be refunded."
Based on this plus further issues with the current apartment market, AAA has reluctantly advised home buyers not to buy apartments until there is adequate consumer protection.
“Every day we get calls from buyers who are trapped in five-year sales contracts and are still waiting, two years later, for construction to commence,” Ms Reece says. The WA apartment sector is in crisis, she says, with the sector battling serious defects, builder insolvencies and the absence of home warranty insurance for apartment owners in buildings of four-storeys or more.
“We urge the State Government to implement consumer safeguard measures for WA apartment buyers before Christmas. Until then we recommend WA home buyers hit pause on apartments until the State Government intervenes to ensure their rights are protected.”