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{{propApi.successMessage}} {{region}} Change locationTax reform needed to address housing affordability
Tax reform needed to address housing affordability
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“Taxing housing only contributes to less houses being built causing rentals to increase and home ownership to decline.”
In 2019, the Centre for International Economics (CIE) released a research report Taxation on the Housing Sector which identified the costs associated with bringing land and housing to market and provided a breakdown of these costs as either resource costs, regulatory costs (red tape), statutory taxes (federal, state and local) or excessive charges.
The research showed that the combined costs of the statutory taxes, regulatory costs and excessive charges equate to 50 per cent of the cost of a new house and land package. The situation since 2019 has only worsened.
“While many of the taxes are applied by local and state governments, there are a range of federal financial relations mechanisms that could be used to leverage reforms that directly impact the price of new housing.
“The tax that has a direct impact on home ownership is stamp duty. The often large, one-off tax is a major barrier to first home buyers getting into a new home. The added cost of stamp duty often means the difference of being able to buy or not.
“The Government needs to lead the way via National Cabinet and encourage the states and territories to universally drop stamp duty and replace it with another more equitable and affordable tax.
“There are also many examples of cascading taxes where a tax paid at one point in the process of bringing a new home to market forms part of the taxable value at a subsequent stage of development further eroding affordability.
“With the Federal Budget just around the corner, HIA believes the opportunity needs to be now for the Federal Government to enter into frank discussions with the states and territories around tax reforms for home building. Addressing the way the industry and home buyers are taxed is key to bringing the problem of housing affordability under control,” concluded Ms Martin.
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Agreement on Draft NCIF Blueprint an important step forward
“The Housing Industry Association (HIA) took part in the National Construction Industry Forum (NCIF) today and it was encouraging that the Forum reached agreement on establishing a draft ‘Blueprint for the Future’ to drive long-term change in the industry,” said HIA Managing director, Jocelyn Martin.
Building Standards are not planning controls
“The proliferation of building standards in Council planning controls needs to stop now,” said Brad Armitage HIA Executive Director NSW.
Streamlined planning system to deliver more homes for Tasmanians
“It is pleasing to see that should the Tasmanian Liberal Government be re-elected it is committed to planning reform and streamlining approvals that can deliver tangible and improved planning outcomes to get Tasmanians in homes faster,” said HIA Executive Director Tasmania Stuart Collins.
IPART Review of Sydney Water Prices
In line with this, HIA notes that the Sydney Water Price Proposal 2025-30 (SW proposal), highlights the critical relationship between the provision of water related infrastructure and housing delivery, and has set its capital expenditure proposal accordingly.