Increasing the GST on new homes will add tens of thousands of dollars to new home prices and make owning a home even more out of reach for many Australians, says a major housing association.
According to Housing Industry Association chief executive of industry policy and media, Graham Wolfe, new housing is already weighed down by the burden of tax, so increasing the GST will destroy housing affordability in an already unaffordable market.
“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,” he said.
“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.”
Wolfe is now urging the government to exclude housing from any future increase in the GST.
“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.
“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 aging population. Lifting the GST on new housing will dampen new housing activity,” he said.
