The housing market is being weighed down by excessive and inefficient taxation beyond just stamp duty, according to a major housing lobby.
Recent research released by the Property Council of Australia shows that average stamp duty costs have increased by between 527% and 795% across the country in the last twenty years. However, Housing Industry Association chief executive of industry policy and media, Graham Wolfe says stamp duty is just one part of a bigger problem.
“In some states the total tax bill amounts to over 40% of the final price of a new home,” he said.
“…there are many other taxes on new homes including developer infrastructure levies, which can be over $70,000 on a new house and land package, and which unfairly require new home buyers to fund community assets upfront.”
While the Property Council of Australia’s submission to the Federal Government’s tax white paper recommends replacing stamp duty with more efficient and less harmful revenue sources such as GST, Wolfe argues that GST also needs an overhaul.
“GST is levied on new homes but not existing properties. Adding tens of thousands of dollars on a new home, GST creates a price differential between new and existing residential properties, which hits affordability, supply, employment and economic activity,” he said.
However, it is the “cascading effect” of taxes which is the biggest problem facing housing affordability.
“Infrastructure charges, GST and stamp duty add $140,000 and more to the cost of a new home in Sydney, while a plethora of other taxes, levies, fees, changes, rates and duties take the total tax grab to over 40% of a new house and land package,” Wolfe said.
“Taxes add more than $250,000 to the price of a new home in Sydney, accounting for 40% ($1,350 per month) of repayments for the life of a home mortgage.”