Homeowners offered tax relief in the face of construction delays

With the shortage of both skills and materials pushing back construction time frames, Western Australia is offering tax relief for frustrated people building homes – in some cases, even dolling out refunds on tax already paid.

Jarrod
By Jarrod
4 Min Read

With the shortage of both skills and materials pushing back construction time frames, Western Australia is offering tax relief for frustrated people building homes – in some cases, even dolling out refunds on tax already paid.

According to Treasurer Rita Saffioti, WA’s residential construction market has “faced constraints” in recent years, with labour and material shortages limiting the State’s ability to respond to the strong demand for housing.

These industry woes have reportedly caused widespread delays in construction projects across the State, forcing many homeowners to pay land taxes because their new homes were not completed within two years.

About 20,650 houses were being built in the state at the end of June, according to the latest data from the Australian Bureau of Statistics. That’s down roughly 3 per cent from the peak in December 2022.

To help these struggling Aussies and encourage further housing development, the Cook Government’s latest Land Tax Assessment Amendment Bill promises to offset the climbing costs of the blown-out projects. 

The bill offers two temporary exemptions for those who started building or refurbishing their homes between 1 July 2020 and 30 June 2023.

A three-year exemption will apply for a home being constructed or refurbished if the owner does not also receive an existing exemption for their current home. 

The exemption can also be extended for another year in “limited exceptional circumstances”, such as when the builder goes into liquidation.

A two-year exemption will apply for a new home that is being built or refurbished while the owner lives in their existing home. The exemption can be extended for another year in exceptional circumstances, such as material or labour shortages caused by market conditions.

Eligible taxpayers who have already paid land tax will receive a refund of the tax paid. 

Finance Minister Sue Ellery says the government is aware of the hardships many homeowners have faced during this year’s turbulent construction sector. 

Housing Minister John Carey said the Cook Government is committed to easing household pressures. 

“… we’re using every lever we can to boost housing supply – including through temporarily extending land tax exemptions for eligible homeowners currently building a new home,” said Carey. 

“This tax amendment should provide some welcome relief for homeowners who are building or renovating a home.”

Real Estate Institute of Western Australia (REIWA) CEO Cath Hart says these new exemptions represent a welcome saving for people currently building new homes or renovating.

“The ongoing delays in the building industry have pushed completion times out significantly. This is not only putting a strain on the property market, it’s also putting a strain on people’s finances,” Ms Hart said.

“Land tax is just one of the extra costs people are facing if their home takes longer than two years to complete.

“This will offer some relief for those building or renovating while also juggling the costs of a mortgage or rent on their current residence.”

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Jarrod
By Jarrod
Jarrod Brown combines his background in journalism, copywriting and digital marketing with a lifelong passion for storytelling. He has a strong passion for new and emerging consumer technology within the building sector. He lives on the Sunshine Coast - usually found glued to the deck of a surfboard.