HIA policy report highlights taxation burden on sector
The Housing Industry Association has launched the residential building industry’s policy imperatives for the 2016 Federal Election, titled Housing Australians.
Housing Australians contains 40 policy imperatives developed to address the dual challenges of producing sufficient affordable housing in Australia to meet both the current and projected population of our nation.
Housing Australians includes economic policies for growth, as well as actions for improving efficiency, such as reforming building and planning laws, cutting red tape, creating a fair and productive workplace, reducing the inequity and inefficiency entrenched in the current model for funding new housing infrastructure, fostering small business and training for a skilled future.
One of the 40 imperatives focuses on the taxation burden on the Australian housing industry. The HIA commissioned independent research into the taxation of Australia’s housing industry, with a particular focus on new housing.
The research was undertaken by the Centre for International Economics. The CIE collated information on all the taxes that eventually contribute to the final price of a new home, with figures then verified with a large number of residential building businesses.
A computable general equilibrium model was then used to analyse the overall tax burden by industry sector and to also examine a number of tax scenarios.
The report provides compelling evidence that, on virtually any basis of measurement, and in both absolute and relative terms, the taxation burden borne by Australia’s residential building industry is excessive.
It is not only the Commonwealth Government that extracts large amounts of taxation from housing and the residential building sector. State and local governments also rely heavily on taxes and charges on residential properties for their revenue.
The taxes analysed include: the stamp duties levied at different points in the housing supply chain; a raft of levies and compulsory fees; the excessive portion of a range of fees, charges and levies; as well as the generic taxes levied across all sectors such as income taxes, fuel taxes, payroll taxes and import duties. GST and the final stamp duty payment cascade on top of these already high taxes, escalating them further.
When all taxes are included, the taxation on a new house in Sydney is an estimated 44 per cent of the purchase price. For Perth the share is 38 per cent.
I encourage you to give Housing Australians your strongest consideration by going to www.hia.com.au/ election where you can download a PDF of the document and view “Real Facts” for analysis on key subjects.
You can assist the association’s campaign by sending a message to your local politician expressing your concerns.
John Gelavis, Executive Director WA - Housing Industry Association.