WA Budget delivers housing tax relief but stops short of broader reform

The 2026–27 WA State Budget is ultimately a cautious tax Budget, targeted, politically safe and heavily focused on housing, rather than broad-based reform. 

The Government’s headline tax measures centre on expanded transfer duty relief for first home buyers and broader off-the-plan concessions aimed at supporting housing supply and easing entry costs for purchasers.

BDO Indirect Tax Director, Phil Renshaw, said these changes are not solely directed towards first home buyers, but duty concessions will also be made available to assist seniors to downsize.

The Budget introduces a new foreign buyers duty exemption aimed at boosting housing supply and avoiding unintended impacts on locally based builders with foreign ownership structures. 

Applying to transactions entered into on or after 7 May 2026, the exemption is available where a foreign buyer acquires land, constructs new dwellings and sells them within two years of purchase. 

Importantly, the measure is broader than the existing exemption regime, which is limited to significant developments of 10 or more dwellings. The new concession is intended to support a wider range of residential development activity that adds to WA’s housing stock. 

Phil said the enhanced build-to-rent land tax concession also reinforces a clear policy theme: incentivising residential development through selective concessions rather than systemic tax reform. 

What is equally notable, however, is what the Budget does not do. 

“There are no substantive changes to payroll tax, no broader duty or land tax reform, and no changes to mining or energy royalties. For business, the message is one of stability and predictability — but also missed opportunity,” Phil said. 

“In particular, small and medium-sized businesses remain burdened by what many regard as an inefficient and increasingly outdated payroll tax regime. While the Government has opted against increasing payroll tax settings, it has also declined to provide any meaningful new relief or concessions for employers facing sustained cost pressures.” 

That omission is likely to attract scrutiny given the State’s strong fiscal position and continuing surpluses. 

“With businesses contending with rising fuel costs, inflationary pressures, higher wages, insurance costs and broader cost-of-living impacts flowing through supply chains and consumer demand, this Budget presented an opportunity for the Government to provide targeted payroll tax relief to smaller employers,” Phil said. 

“Even modest measures, such as threshold increases, temporary rebates or expanded exemptions, would have sent a strong signal to the SME sector. 

“Instead, the Government has chosen a narrower housing-focused taxation package while leaving the broader state tax framework largely untouched.” 

Phil said the Budget also stopped short of addressing business transfer duty, despite WA remaining one of only two Australian jurisdictions to retain the tax. With an eighth successive surplus, the Government had an opportunity to remove a longstanding barrier to business transactions and succession planning. 

From a tax advisory perspective, the Budget is therefore best characterised as a stability Budget rather than a reform Budget: supportive of housing policy objectives, fiscally conservative, but ultimately limited in terms of broader business tax relief or structural tax modernisation.
 

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For media enquiries:

Tate Papworth 
Manager, Media 
E: Tate.Papworth@bdo.com.au 
Ph: 0433411189