State governments should abolish stamp duty on new housing to address the housing affordability crisis and help alleviate the impact of next month’s likely interest rate rise, the Residential Development Council said today.
The RDC said while interest rates would affect housing affordability around the nation, rising state government taxes, levies and charges were having a bigger impact.
“Interest rates are a bit of a red herring in the bigger debate about housing affordability: the real issue is that housing is too heavily taxed and state governments hold the key to the solution,” said RDC Executive Director Ross Elliott.
Mr Elliott said the GST on new housing generated an estimated $4billion to $5billion every year – money which all flowed back to state governments. GST does not apply to established houses.
“So state governments benefit from the GST on new housing but they have also kept in place pre-GST taxes on new houses – stamp duty for purchasers and stamp duty land taxes on development.”
“In some states, governments go a step further and impose infrastructure levies on the new housing market – making it a triple tax dip.”
Mr Elliott said the RDC was increasing pressure on state governments to slash stamp duty on new housing to counter the combined effect of interest rate rises, taxes and levies.
“State governments have to stop passing the buck on the housing affordability crisis. To accept such huge volumes of money as taxes on new housing and to voice concerns about affordability at the same time is plain hypocrisy,” he said.
“The immediate solution is to slash or simply abolish stamp duty on new housing, so that at least buyers of new homes and home units won’t continue to be taxed twice or even three times on their purchase.”
“The effect of abolishing stamp duty on purchases of new homes would make a November interest rate rise pale into insignificance.”
Ross Elliott, 0407 177 591
The Residential Development Council is the Property Council of Australia's specialist industry forum for Australia's leading residential developers. Established in 2005 as a result of industry representations, the Residential Development Council focuses on key issues of concern to the residential development industry nationally and aims to show leadership in policy, research and understanding of industry fundamentals.