GST rise on new homes will hurt affordability

The Housing Industry Association (HIA) warned attendees of this week’s leader’s retreat that lifting the GST on new housing will add tens of thousands of dollars to new home prices, crushing the dream of home ownership for many Australians. Source: TimberBiz
“New housing is already weighed down by the burden of tax,” said HIA Chief Executive Industry policy and Media Graham Wolfe. “It is usually seen as an easy cash grab by Governments.
“Adding another five per cent, or more, on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market.
“An increase of five per cent in the GST on a typical house and land package in Sydney will increase the cost of a mortgage by around $60,000 over the life of the loan.
“If an increase in GST is seen as the remedy for Government’s collective funding shortfall, then the simple answer is to exclude housing from any future increase,” he said.
“Independent research has demonstrated that the total combined taxes, levies and charges on a new home can be up to 44% of the price of a new house and land package in Sydney, where this week’s retreat is being held.
“GST currently applies to new housing but not existing homes, which is creating a price discrepancy between the two.
“We need more housing stock to accommodate our growing and ageing population. Lifting the GST on new housing will dampen new housing activity.
“Increasing the burden on home buyers should be a no-go area for Governments if they are really concerned about housing affordability,” Graham said.