The New South Wales residential building industry is being stifled by red tape and taxes leading up to the state election, according to the Housing Industry Association (HIA).
A large portion (43%) of a new house and land package's cost of is made up of taxes, charges and levies from all three tiers of government. On top of this, the policies implemented by the state government continue to add to the tax burden for the housing industry, according to David Bare, HIA executive director NSW.
Several regulations and taxes have been implemented or proposed in the last 18 months, each one having a negative effect on housing affordability and supply, Bare said.
These include slashing caps on Section 94 development contributions, adding $20,000 to $40,000 per home; increasing the BASIX energy efficiency targets, adding an average of $10,000 per new dwelling; introducing a 2% defect bond and an additional double-barrel inspection regime for strata developments.
These modifications could easily account for an additional $70,000 to $90,000 per home, and once applied, they may be subject to stamp duty, said Bare.
With the issues mentioned above, HIA asserts that all new legislation and regulation affecting the housing sector should be subject to a thorough public regulatory impact assessment.
"There are many things our state politicians can consider to help housing supply and affordability that don’t require drastic structural change," said Bare.
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