Thousands of people had gathered to watch the annual fireworks show on Thursday when the twin-engined seaplane nosedived into the water.
"He just came in too steep, banked hard left and that was it. The left wing caught the water and the plane hit the water and snapped in half," one witness told Australia's Seven Network.
Perth police said emergency services were on the scene within minutes but could not save the pilot and passenger.
The cause of the accident was under investigation.
An image grab from the video that shows the seaplane (L) about to fall into the river.
Amateur video filmed during Australia Day celebrations in the city of Perth showed the moment a light plane crashed into the Swan River, killing both people onboard.
