I've had a lot to say on Stamp Duty recently - as are many, given we are in the midst of a tax reform process that with the right political courage, could make a real change.
But the issue of affordability isn't just stamp duty, its also the several other taxes, rates and charges that hide behind the stamp duty whipping post and add to the cost of housing. Granted that federally imposed GST also plays a big part when it comes to residential housing, but the majority of these other charges are imposed by the State Governments. A key one of these being infrastructure charges that are not commensurate to the services provided.
It's a little distressing when you think about the proportion of our home loan repayments that goes towards paying off these taxes, compared to the cost of the materials and labour to build it.
The residential building industry is being weighed down by excessive and inefficient taxation, beyond just stamp duty, according to the Housing Industry Association (HIA). “In some states the total tax bill amounts to over 40% of the final price of a new home,” said HIA Chief Executive Industry Policy and Media, Graham Wolfe. “The HIA said that infrastructure charges, 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, charges, 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% ($1,350 per month) of repayments for the life of a home mortgage,” Mr Wolfe said.