Taxes, statutory charges and levies add as much as 50% to the cost of new housing.
In a housing affordability and supply crisis, this is an obvious area for significant reform and Government should be careful not to make changes that remove initiatives that encourage supply.
It is critical that the Federal Government incentivise the States & Territories in the short term to:
- halt any further increase in property based taxes including developer contributions, stamp duty, land tax and other fees and charges.
- actively strip away taxes holding back affordability – such as reducing development fees and charges, reducing stamp duty thresholds to ease rates on median priced housing.
It is clear however, that lasting, long term property tax reform for affordability needs to involve:
- Strategic review of all Federal and State/Territory property related taxes to reduce the burden on property prices rather than merely swapping one tax burden for another.
- Acknowledging that the capital gains tax discount is a feature of all investment types that also supports passive investment in rental property to maintain supply, and is a simple, fair taxing of gains.
In the case of the capital gains tax discount, any change to the existing approach will mean significant compromises on outcomes that risk rental supply, increased rents & skewed investment.
We need to focus on genuine housing supply, & removing housing delivery roadblocks.
The CGT discount for investment, including rental property, is actually supporting supply by encouraging investment in rental housing for ordinary Australians including specific initiatives to stimulate affordable housing for low-income families.