In its latest report, the Housing Industry Association commissioned the Centre for Independent Economics to perform a ‘bottom up’ investigation of taxes and regulatory costs which impact the delivery of new homes and apartments. It found that in Sydney, taxes, regulatory costs and ‘excessive charges’ add an average of $417,000 to the cost of now house and land packages in greenfield areas. This accounted for half (50 percent) of the price tag of packages in these areas. In Melbourne, Brisbane, Perth and Adelaide, meanwhile, taxes and regulatory burdens account for between 29 percent and 37 percent of the cost of new house and land packages in greenfield areas. In apartments, meanwhile taxes, regulation costs and other excessive charges added between $118,000 (Adelaide) and $275,000 (Sydney) to the cost of new homes across the five capitals - accounting for between 28 percent and 37 percent of the costs of new apartment purchases. The report also found that federal, state and local governments raked in $51 billion in revenue from taxes and charges levied upon land and housing in 2016/17. These include stamp duty, land tax, municipal rates and other taxes on land and housing. At this level, the revenue intake from housing and land is well below the $262 billion and $64 billion derived from income taxes and GST respectively but is almost equivalent to the value of taxes applied to import tariffs and taxes on vehicles, insurance and gambling put together. HIA Economist Tim Reardon says taxes and regulatory burdens are impacting new home affordability. “Housing is a true necessity but unfortunately the current tax imposts have constrained housing supply and driven the escalating prices over recent decades, leading to higher rents and unnecessary financial pressure on Australians,” Reardon said. “Housing is one of the most heavily taxed sectors of the economy alongside of the ‘vice taxes’ applied to cigarettes and alcohol. “Over the ten years it takes to bring a house and land package to market there is a long and cascading list of regulatory costs and taxes that account for up to half of the cost of the new house and land package. “Stamp duty on the land and the house, GST, land tax, council rates, payroll, income and company taxes combine to raise almost $180,000 in taxes on a typical new house and land package. “This does not include the additional $40,000 in development charges or the $220,000 due to red tape. “Households have to borrow more to pay these taxes in order to put a roof over their head. They then repay these costs over the lifetime of the loan. “This makes the mortgage for home buyers 60 to 100 per cent more expensive than would otherwise be the case.”

In its latest report, the Housing Industry Association (HIA) commissioned the Centre for Independent Economics to perform a ‘bottom up’ investigation of taxes and regulatory costs which impact the delivery of new homes and apartments.

It found that in Sydney, taxes, regulatory costs and ‘excessive charges’ add an average of $417,000 to the cost of now house and land packages in greenfield areas.

This accounted for half (50 percent) of the price tag of packages in these areas.

In Melbourne, Brisbane, Perth and Adelaide, meanwhile, taxes and regulatory burdens account for between 29 percent and 37 percent of the cost of new house and land packages in greenfield areas.

In apartments, meanwhile taxes, regulation costs and other excessive charges added between $118,000 (Adelaide) and $275,000 (Sydney) to the cost of new homes across the five capitals –   accounting for between 28 percent and 37 percent of the costs of new apartment purchases.

The report also found that federal, state and local governments raked in $51 billion in revenue from taxes and charges levied upon land and housing in 2016/17.

These include stamp duty, land tax, municipal rates and other taxes on land and housing.

At this level, the revenue intake from housing and land is well below the $262 billion and $64 billion derived from income taxes and GST respectively but is almost equivalent to the value of taxes applied to import tariffs and taxes on vehicles, insurance and gambling put together.

HIA Economist Tim Reardon says taxes and regulatory burdens are impacting new home affordability.

“Housing is a true necessity but unfortunately the current tax imposts have constrained housing supply and driven the escalating prices over recent decades, leading to higher rents and unnecessary financial pressure on Australians,” Reardon said.

“Housing is one of the most heavily taxed sectors of the economy alongside of the ‘vice taxes’ applied to cigarettes and alcohol.

“Over the ten years it takes to bring a house and land package to market there is a long and cascading list of regulatory costs and taxes that account for up to half of the cost of the new house and land package.

“Stamp duty on the land and the house, GST, land tax, council rates, payroll, income and company taxes combine to raise almost $180,000 in taxes on a typical new house and land package.

“This does not include the additional $40,000 in development charges or the $220,000 due to red tape.

“Households have to borrow more to pay these taxes in order to put a roof over their head. They then repay these costs over the lifetime of the loan.

“This makes the mortgage for home buyers 60 to 100 per cent more expensive than would otherwise be the case.”