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How would WAxit affect the Aust...

How would WAxit affect the Australian property market?

Speculation over whether Western Australia could separate from the rest of the country and operate as an independent state has increased in recent weeks.

The state's Liberal Party has voted in favour of a motion that would allow Western Australia to become financially independent from the wider nation - a move that has been dubbed WAxit in the media.

State president Norman Moore told the press: "We send a significant amount of revenue in the form of income tax, capital gains tax, superannuation contributions' tax [ - it] all goes to Canberra.

"Western Australians ... are not happy with the way in which Western Australia is being treated. Because we are a long way from Canberra, we feel that we are being ignored and that our interests aren't being taken into consideration by both sides of politics."

WAxit is not about to happen anytime soon, with the state's Liberal leader Mike Nahan voting against the divisive issue, but what would it mean for the property market across the state and indeed Australia as a whole?

According to a new article in property publication Domain, WAxit would most likely help to boost the property landscape in Perth. Over the past few years, it has flagged behind Melbourne and Sydney in terms of which is the biggest market, but independence for Western Australia would make Perth the largest property market once again, in its own nation.

Western Australia is home to the highest percentage of first-time buyers of all other Australian states, meaning there would be plenty of interest for homes in the area should investors decide to pool their money here ahead of a potential WAxit.

What's more, the affordability of properties in Perth is currently at a high, making it an attractive market for young first-time buyers, as well as experienced investors looking to add to their portfolios.

Only time will tell whether WAxit will indeed become a reality, but property investors may want to think about which side of the state they would prefer to place their assets before it potentially hits the country as hard as Brexit has hit the UK.

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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