Shortest day delivers short sighted new property taxes
NSW Executive Director of the Property Council, Jane Fitzgerald, said today’s NSW State budget imposed a billion dollars’ worth of short sighted new property taxes which would jeopardise housing supply and do nothing to improve housing affordability across the state.
“In a budget that trumpets a significant surplus of $3.7 billion next financial year – and solid surpluses in the out years – there is no justification made for imposing a billion dollars’ worth of new taxes on the NSW property sector,” Ms Fitzgerald said.
“These new taxes will slow down housing supply and are the latest incarnation of this State’s addiction to inefficient, anti-growth property taxes.
“As the Prime Minister has said, if you want less of something tax it – and here that will mean fewer dwellings and fewer affordable houses than there would otherwise have been.”
The NSW State budget confirms that foreign owners, investors and developers of residential land will be slugged with a 4 per cent stamp duty surcharge from today and a 0.75 per cent land tax surcharge from 1 January 2017 in addition to the usual rates imposed on all transactions.
The measures are projected to raise $835 million and $166 million respectively over four years. The budget papers show that even before the foreign investor component is added in, stamp duty is projected to grow by an average of 4.7 per cent per annum over the next four years.
Ms Fitzgerald said this is not just a tax on people buying homes, but people and companies wanting to invest in NSW to develop the homes we desperately need.
“The Government’s own Intergenerational Report released with the budget papers notes that NSW is facing an accumulated undersupply of 100,000 dwellings because housing approvals have not kept pace with strong population growth,” Ms Fitzgerald said.
“The problem with this big new tax is that it can only make that problem worse, not better.
“More taxes on homes being built will see more costs being passed on to Australians who buy them, making affordability worse.
“And with off shore investors accounting for about 15 to 20 per cent of pre-sales in our capital cities if those dwelling don’t get built there will be even fewer homes to buy.
“Introducing a big new tax will put that investment – as well as large scale institutional investment – at risk and make it harder for people in NSW to get into a new and affordable home.”
Ms Fitzgerald said the Treasurer should release any Treasury modelling or advice about the impact of the big new taxes to allay community concerns about its potential impact on housing supply and affordability.
Media contact: Jane Fitzgerald | M 0419257835 | E [email protected]