If I asked you how much of the cost of a new home goes to pay for various taxes, what would your guess be?
Five percent, maybe ten percent?
Well you’d be way of the mark. It could be as much as 44%.
Research from the Centre for International Economics, commissioned by the HIA, found that Sydneysiders paid about 44% tax when they built new homes, paying an average of $268,000 in the form of various taxes.
In Brisbane that figure was 36% or an average of $191,000 spent on tax and in Melbourne tax accounted for 38% of the cost of new homes.
More than a third of the cost of new homes in Canberra is poured straight into government coffers.
HIA managing director Shane Goodwin said the research had shown that new housing was one of the heavily taxed sectors of the Australian economy. ‘‘It’s time to recognise and act on the fact that the tax burden on new housing in Australia is excessive,” he said.
The HIA has made a submission to the Federal Government’s recent tax forum, which pushes the case for reducing the taxes on new homes.
“Shelter is a necessity of life, every bit as important to individuals as food, medicine and clothing and it is the base from which Australians participate in the workforce, education and broader society,’’ Mr Goodwin said.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.