Yet Another New Tax on NSW Housing
The NSW government has introduced yet another new tax on housing transactions. Yesterday, I gave a post-budget presentation to a business group in Western Sydney, together with Westpac’s Matthew Hassan. Matthew presented some stunning charts showing the growth in the tax burden on housing in each state, with NSW the clear winner. Indeed, the tax burden on a new house and land package on Sydney’s suburban fringe is now such as to make it unprofitable to bring to market, which helps explain why new housing supply in the state is running at 1950s levels.
If only some of the outrage directed against negative gearing and capital gains tax concessions by ignorant journalists and commentators could be marshalled against the taxes and charges that are really responsible for putting upward pressure on house prices.
posted on 13 May 2010 by skirchner
in Economics, House Prices
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Comments
This is a fairly small nuisance tax, but isn’t it appropriate in principle for buyers of greenfields developments to pay infrastructure charges reflecting the incremental costs of remote vs infill development? This is a separate issue to state government land release policies and council development restrictions.
Posted by .(JavaScript must be enabled to view this email address) on 05/13 at 02:03 PM
“isn’t it appropriate in principle for buyers of greenfields developments to pay infrastructure charges reflecting the incremental costs of remote vs infill development”
I think the issue is why these levies are much higher in NSW than anywhere else. Moreover, households are already hit with connection charges, infrastructure levies and tariff increases meant to support new infrastructure, so there may be some double-dipping going on.
Posted by skirchner on 05/13 at 03:01 PM
If negative gearing was only allowed on new builds, there would be a massive supply response across the nation.
Instead, you’re up in arms about a $200 tax on a $600,000 purchase. Get some perspective!
Posted by .(JavaScript must be enabled to view this email address) on 05/17 at 09:46 AM
It increases the NSW Government’s financial interest in inflated house prices.
Posted by Lorenzo on 05/26 at 03:55 PM