LAST week’s rise in official interest rates and signs of a slowing housing sector are likely to bring the cost of building a home and the associated taxes into greater focus.
LAST week’s rise in official interest rates and signs of a slowing housing sector are likely to bring the cost of building a home and the associated taxes into greater focus.
And with State Governments around Australia announcing record windfalls from stamp duty and similar imposts, many in the property industry are getting hot under the collar.
Peak property industry groups Property Council of WA, Real Estate Institute of WA and Urban Development Institute of Australia (WA) have embarked on a series of preliminary meetings to create a united approach in the campaign to reduce property taxes.
REIWA president Jim Henneberry said the association had called for the meetings in an attempt to develop a stronger and broader lobby group.
Mr Henneberry said land developers, the commercial sector, pensioners and investors were affected by property taxes. Through unity of the related industries, he said, the State Government would get the message that people in WA were tired of excessive property taxes.
Several government reviews and inquiries into housing are under way, including the Federal Government’s Productivity Commission inquiry into First Home Ownership and the WA Government’s inquiry into land developer contributions to the cost of infrastructure.
UDIA executive director Marion Fulker said government policy was driving up the cost of new housing and therefore directly affecting affordability for the end consumer.
She said the new housing sector was seen as an easy target for taxation but made up about 2 per cent of the market.
“Consistency in government policy and processes across the board would see efficiencies gained that would benefit the industry and therefore the end purchaser,” Ms Fulker said.
Advocating that State and local government infrastructure taxes be slashed, the Housing Industry Association is promoting a plan it claims will cut more than $27,000 off the cost of a new home in Perth.
According to its submission to the Productivity Commission’s inquiry into First Home Ownership, there are now more than 20 indirect taxes and charges embedded in the prices of a new home. On average, new homebuyers channel nearly $11 billion a year into government coffers.
The ‘HIA Plan’ aims to remove State and local government social and community infrastructure taxes, restore the value of stamp duty rebates for first home buyers, and remove the double and triple dipping of stamp duty and GAT on the price of a new house and land package.
The industry group is pushing for the cost of community and social infrastructure to be spread across the broader community rather than having new homebuyers wearing the bulk of the cost burden.
HIA has suggested the State Government could take control of funds raised by increases in local government property rates and channel the revenue into a special community building fund levy, which could be available to the rate-paying community solely for the provision of social infrastructure.
The State Government has forecast that the cost of providing infrastructure in Perth’s north-west corridor to land, currently approved for urban development, will total $8.3 billion.
UDIA has voiced concerns that the State Government is preparing to follow the lead of the NSW Government in implementing a transport tax/levy on new residential lots. Each new residential lot in NSW attracts a tax of $15,000.
Like HIA, the land development group argues that infrastructure, particularly social infrastructure such as recreation and community facilities, provides benefits to the broader community, not just new homebuyers, and should be equitably shared among the community to avoid price increases in housing and reduce pressure on new homebuyers.
