Red tape and high taxes have stunted home construction and sent prices soaring across the country

REVEALED: How red tape and high taxes have stunted home construction and sent prices soaring across the country

  • Levies, stamp duty, GST, council rates and land tax behind house price increase
  • The cost is as high as 50 per cent in Sydney and 30 per cent in Melbourne 
  • The report stated 14 per cent of total GST revenue is raised from housing  

High taxes and regulatory red tape as well as economic factors have stunted new home construction and caused prices to surge across the country, according to an industry body.

A report commissioned by the Housing Industry Association lists levies, stamp duty, GST, council rates and land tax as factors that drive up home prices, The Australian reports.

The HIA says the cost is as high as 50 per cent of a house and land package in Sydney, 37 per cent in Melbourne, and between 29 and 33 per cent in Brisbane, Perth and Adelaide.

The report stated that 14 per cent of total GST revenue raised came from the housing sector because most of the tax burden is being transferred directly to households.

A report commissioned by the Housing Industry Association lists levies, stamp duty, GST, council rates and land tax as factors that drive up home prices (stock image)

‘It is unacceptable that the red tape and tax incurred in the construction of a ”house and land” package as a percentage of the purchase price is 50 per cent in Sydney and 37 per cent in Melbourne, as outlined in this report,’ Housing Minister Michael Sukkar said. 

‘It is also unacceptable that the supply of new housing is so badly constrained by state and territory planning and regulatory bottlenecks.’

HIA executive director NSW David Bare said housing was ‘one of the most heavily taxed sectors of the economy, alongside the ”vice taxes” applied to cigarettes and alcohol’.

Mr Bare said having to pay $417,000 on taxes and regulatory costs when building a home was too much of a burden.  

Among some of the regulatory charges Australians have to pay are soil testing, native vegetation protection, contamination reports, heritage assessments, bushfire assessments, traffic management fees, site inspection fees, building levies, connection fees and flood assessments.

The HIA says the cost is as high as 50 per cent of a house and land package in Sydney, 37 per cent in Melbourne, and between 29 and 33 per cent in Brisbane, Perth and Adelaide

The HIA says the cost is as high as 50 per cent of a house and land package in Sydney, 37 per cent in Melbourne, and between 29 and 33 per cent in Brisbane, Perth and Adelaide

In an attempt to unlock the housing supply, the commonwealth is implementing its reducing Pressure on Housing Affordability package. 

This package will make $1billion available through the National Finance and Investment Corporation. 

The government will also be launching their First Home Loan Deposit scheme on January 1 2020, which aims to help 10,000 first home buyers by topping up their 5 per cent deposit with a government guarantee of 15 per cent per loan. 

The report stated that 14 per cent of total GST revenue raised came from the housing sector because most of the tax burden is being transferred directly to households

The report stated that 14 per cent of total GST revenue raised came from the housing sector because most of the tax burden is being transferred directly to households

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