The Residential Development Council has welcomed the State Coalition’s promise to phase out stamp duty on residential property, arguing that the move is necessary simply to claw back many of the tax rises which have impacted on residential property in recent years.
According to research prepared for the Residential Development Council, the combined effect of various taxes, fees, charges and levies on the price of a new house had reached crisis levels – climbing in many cases by more than 300% in recent years.
“For example, the tax and compliance bill for a new Ipswich home is now around $80,000 – 388 per cent more than five years ago,” said RDC National Executive Director, Ross Elliott.
“In Redlands, that figure is now over $135,000 or 583 per cent more than five years ago, on the Gold Coast it is $84,000 or 342 per cent more than five years ago, and in Maroochy it is just under $100,000 or 321 per cent more than five years ago,” he said.
For home units in Brisbane, the tax and compliance bill has surged 200 per cent in five years to reach $114,000 and on the Gold Coast it has risen 282 per cent to reach $87,000 and in Maroochy it has risen 216 per cent to reach almost $96,000.
Mr Elliott said that a major beneficiary of the combined tax slug were State Governments, and Queensland was no exception.
“This is best illustrated when you figure the GST into the picture. Although collected by the Federal Government, the money goes back to the states. State Governments are thus benefiting from the GST revenues on new housing, while still pocketing stamp duties, land taxes and other charges,” he said.
“If we take Redland as an example, there’s over $40,000 in GST, plus a combined $17,500 in stamp duty paid by the developer and the purchaser, plus around $3,750 in land tax – all built into the price of a typical new home of $464,000, and the state government is getting the lot.”
“That’s a total tax bill – not including local government fees and taxes – of over $62,000 or 13 per cent of the price of a new house and land in Redland Shire.”
“By comparison, millionaires buying an existing $1.35 million home in inner city Ascot are only paying $47,850 in stamp duty – so the rich are effectively paying less housing tax.”
Mr Elliott said the Residential Development Council was stepping up pressure on all state governments to reduce the stamp duty burden, especially on new house and new home units, as a way of countering the rapidly increasing taxes and charges that applied to new housing.
“Some tax relief is absolutely essential, without a serious commitment to reducing taxes on housing, we are facing an affordability crisis which is generational in proportions.”
“State Governments around Australia, and Queensland is no exception, have been increasing their reliance on housing taxes to cross subsidise recurrent expenditure areas like health and other community services.”
“But this is a road to nowhere because the problems being created with housing affordability are now largely policy-induced, which will only create even bigger problems for Governments.
“A commitment to abolish stamp duty on housing transfers, given the escalation in taxes and charges in recent years and its impact on affordability, should not be dismissed as unlrealistic – instead it should be discussed as a sensible policy option.”
Ross Elliott, National Executive Director, Residential Development Council, Property Council of Australia, 0417 072 197
Robert Walker, Executive Director - Queensland, Property Council of Australia, 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.