NSW market 'strangled' by taxes and red tape, lobbyist argues

The last 18 months have created lots of red tape and taxes on property to ‘strangle’ the current market, according to the director of an industry body. 

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David Bare, the NSW executive director of the Housing Industry Association, has said the residential building industry has seen large amounts of red tape and taxes, with 43 per cent of the cost of a new house and land package being attributed to taxes, charges and levies from every level of government.

“Despite this, policies implemented by the state government continue to add to the tax burden for the housing industry,” Mr Bare said.

Over the last 18 months, Mr Bare said a number of property-related regulations and taxes, both implemented and proposed, would negatively affect housing affordability and supply and would add an extra $70,000 to $90,000 per dwelling, not including stamp duty.

These polices are:

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  • The removal of caps on section 94 develop contributions, creating an extra $20,000 to $40,000 per dwelling;
  • The increase of BASIX energy efficiency targets, creating an extra $10,000 per new dwelling on average;
  • The delay of the focus on medium density housing to address Sydney’s “missing middle”, after claims of $15,000 in approval costs;
  • The introduction of a 2 per cent defect bond and an inspection regime for strata developments that would add to costs; and
  • The increase of a Greater Macarthur state infrastructure contribution (SIC) of $40,000 per dwelling and new SIC levies in the Hunter area.

Mr Bare said there were other ways that the state government could tackle supply and affordability that would not create such a negative impact.

“For instance, the NSW Productivity Commissioner should be directed to undertake a detailed review of the regulatory burden and costs to the residential sector with the aim of reducing red tape, increasing productivity and thus improving housing affordability,” he said.

“All new legislation and regulation impacting the housing sector should be subject to a thorough public regulatory impact assessment.

“Adding to the problem of housing affordability and rental affordability with new red tape and taxes is not the solution to ensuring people in NSW can afford to buy or rent a home. More needs to be done now, politicians need to get serious and focus on real changes that will make a real difference to the cost of new homes in NSW.”

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