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Supply key to housing affordability


Release Date: 8/03/2017

The Illawarra Business Chamber notes increasing concerns regarding housing affordability and is highlighting the importance of focusing on measures that boost supply and reduce the cost of new housing.
 
The Illawarra saw record building approvals and housing construction in 2016 but a decline in residential building approvals in late 2016 and early 2017 is raising further concerns regarding future affordability.
 
Illawarra Business Chamber Executive Director, Chris Lamont, said the provision of more affordable housing requires a coordinated approach between local, state and federal governments recognising that each has different levers available to boost supply and reduce cost.
 
Numerous reports have identified the housing sector as one of the most heavily taxed sectors of the Australian economy, both in absolute and relative terms. New houses are subject to some of the highest tax takes with a range of government charges, GST and stamp duty applied. On top of these charges and taxes is the impact of inefficient regulation that leads to planning delays and uncertainty that influence finance cost and holding fees.
 
“While broader reform is also required, one measure worth considering is stamp duty input tax credit. If stamp duty is to be levied it should be applied once and should not be levied on top of previously applied stamp duty, taxes and government charges,” said Chris Lamont.
 
Stamp duty is currently levied on each transaction associated with land which means when land is sold to a developer stamp duty applies. The purchase by a builder from a developer triggers a further stamp duty tax take and again when a builder sells to a home purchaser.
 
“Housing affordability is an issue that needs to be addressed by all levels of government. We need measures that reduce the cost of supply and this should involve government meeting some of the costs associated with providing the infrastructure required for our future suburbs and cities,” said Chris Lamont.
 
“Housing affordability is not only critical to support a productive economy but also has the potential to reduce future government outlays related to a range of social issues such as homelessness, joblessness and health,” said Chris Lamont.

Media Contact: Katherine Baker 0417 135 858



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