Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

Taxes add ‘tens of thousands of dollars’ to new home costs

The residential building industry is plagued by “excessive and inefficient” taxation that goes beyond purely just stamp duty, according to the Housing Industry Association.

HIA chief executive of industry policy and media Graham Wolfe said in some states the total tax bill amounts to over 40 per cent of the final price of a new home.

“There is no question that stamp duty is one of the key offenders, with research undertaken last year for HIA by Independent Economics identifying it as the most inefficient tax in Australia’s entire taxation system,” he said.

“However, 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.

“Equally, 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.”

Advertisement
Advertisement

Mr Wolfe noted affordability is further eroded by the effect of “taxing taxes”, whereby a tax such as stamp duty is levied on an amount that already includes a range of other costs.

“GST on infrastructure levies alone can add more than $5,000 to the final cost of a new home, while stamp duty on the total cost of GST adds around $3,000,” he said.

“Infrastructure changes, 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 per cent of a new house and land package.”

Taxes add more than $250,000 to the price of a new home in Sydney, accounting for 40 per cent of repayments for the life of a home mortgage, according to Mr Wolfe.

“Incredibly, in supplying shelter for Australians, residential building contributes 13 per cent of all GST revenue collected by the Commonwealth. Sadly, that taxation revenue drives up the cost of housing,” he concluded.

Taxes add ‘tens of thousands of dollars’ to new home costs
mortgagebusiness

Latest News

Making news this week, Volt Bank set to exit the banking industry, APRA confirms banks treatment for home guarantees, Australian outright ho...

From Friday (1 July), 40,000 new places have become available under the federal government’s schemes to help Australians buy their own ho...

The big four banks continue to dominate the mortgage market with three reporting an increase to their home loan books over May, APRA stats r...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.