Australia’s undersupply issue can be largely attributed to poor government decisions regarding tax, the Housing Industry Association has claimed.
Independent research commissioned by the HIA from the Centre for International Economics highlights the magnitude and negative economic impact of the high taxation on new housing.
According to the report, the high taxation burden on new housing is a primary cause of excessive building costs, low home building levels, a large and growing undersupply of housing, and resultant affordability problems.
The report also found that policy action to remove or significantly reduce these taxes will pay big dividends in terms of improved efficiency, faster growth and increased housing supply.
“It’s time to recognise and act on the fact that the tax burden on new housing in Australia is excessive,” HIA managing director Shane Goodwin said.
“Shelter is a necessity of life, every bit as important to individuals as food, medicine and clothing, and it is the base from which Australians participate in the workforce, education and broader society. Indeed, housing is where Australia’s families are raised, and as such is a critical part of ensuring the nation’s future prosperity and wellbeing.”
Mr Goodwin said the current Tax Forum presents an opportunity for the Gillard Government to put in place the foundation for a strong taxation reform agenda that will not only boost productivity and growth, but can help address policy issues such as Australia’s large and growing housing affordability problem.
“We’ve got to the point where the tax on a median new Sydney home is over $260,000 and it’s clear the type of impact this is having in terms of decreased affordability and constrained housing supply,” he said.
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