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{{propApi.successMessage}} {{region}} Change locationTaxes and regulatory costs continue to damage Victorian housing affordability
Taxes and regulatory costs continue to damage Victorian housing affordability
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HIA Executive Director, Victoria, Keith Ryan said, “the report shows an astounding $373,000, or 43 per cent, of the cost of a new house and land package in Melbourne is comprised of government taxes, regulatory costs and charges.
“Since the last report in 2019, the value of taxes and charges on a new house and land package in Melbourne has increased by a staggering 73 per cent or $157,000.
“That rise far exceeds the growth in average earnings over the same period, which has been around 3 per cent annually. It also far exceeds the $10,000 grant first homebuyers receive.
“First home buyers needed to have saved, or borrowed that extra $157,000, to fund the construction of their new home.
“When governments increase taxes and charges on new homes in Melbourne by 73 per cent, the end homebuyer does not receive a 73 per cent better or larger home.
“HIA regularly reminds policymakers that we cannot tax our way out of the housing crisis – but it seems this advice is not being heeded by the Victorian Government.
“The Victorian Government cannot keep increasing taxes on new homes and expect more to be built. The creeping proportion of taxes on new homes only makes housing more unaffordable,” Mr Ryan said.
The report also found that it takes a year to obtain a development approval for subdivision, and one-third of this is just unnecessary delays.
“Delays are known to be costly, and the amount of delay in getting approvals done surpasses the time it takes to build a home.
Mr Ryan said the total outlay for a new apartment in an infill development is also being driven by escalating taxes and regulatory costs.
“A whopping $236,000, or 32 per cent, of the cost of a new apartment in Melbourne is government taxes, regulatory costs and charges. This is $47,000 higher compared to the 2019 Report.
“In order to increase supply, lower the cost of housing and meet growing demand, governments at all levels need to take a fresh look at ways to reduce the taxes, charges and delays they impose on new home building – this will be the key message in HIA’s 2025-26 State Budget submission,” concluded Mr Ryan.
Statutory Taxes, regulatory costs and infrastructure charges on Melbourne Housing
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