Supply key for housing affordability not new taxes
The property industry in Tasmania pays $927 million dollars in taxes annually, $869 million in wages, creates almost 14,000 direct jobs, and contributes $2 billion in Gross State Product.
The Property Council of Australia is proud of the role that our members play in delivering prosperity and strong communities through private investment which both creates jobs and builds the cities, suburbs and regions which we call home.
Our industry has a significant role to play in the continued economic growth of this state, and that’s why we are dismayed the Labor Party and the Tasmanian Greens are supportive of a review of mainland-style property taxes including Foreign Investor and Vacancy taxes.
In the lead-up to the State Election, all political parties should commit to growth and development policies. Tasmania simply cannot afford anti-business initiatives.
In our view, there is not much point in reviewing interstate regressive taxes unless you plan to implement them.
Why spook the market at such a crucial time in Tasmania’s economic recovery?
These new property taxes were implemented based upon a false assumption in large cities like Melbourne where the foreign investment which helped bring new supply to market would just keep coming.
It’s been shown not to be the case – and at a time when Tasmania is chasing population growth and investment, we should be giving ourselves a competitive advantage by not repeating the mistakes of interstate competitors.
How would a state-based vacancy tax interact with the Federal Government’s version? Will foreign owners purchasing student accommodation be taxed twice? This will have serious implications should we wish to leverage the Launceston and Hobart City Deals, and the West Park UTAS relocation which are so importantly underpinned by education.
Tasmania competes in a global market where capital is shifted daily, yet the foreign investor rate remains extremely low. According to the Real Estate Institute of Tasmania, there were just 58 residential sales to foreign investors in 2017. Further, in the September Quarter 2017, there were only 13 residential sales to international buyers equating to just one per cent of all purchases. We should be encouraging investment to create jobs, not turning them away.
The decision to review mainland property taxes will do absolutely nothing for housing affordability. To even contemplate a review, we would expect that those advocating for these initiatives to have a thorough understanding of the revenue that will be captured. We look forward to the release of this detail.
The Property Council welcomes community discussion and debate regarding housing affordability.
Tasmania is experiencing a period of economic growth which we must work exceptionally hard to maintain, and that should result in a range of housing options being offered to the market.
The Tasmanian Division has outlined the importance of delivering supply to the market to maintain affordability.
We are extremely supportive of new houses being added to the Housing Tasmania stock, providing support for vulnerable members of our community whilst also stimulating the building and construction industry at the same time.
Tasmanians require a variety of housing options at different points in their lives. Inner-city residential development should occur to offer diversity to the market. This will only eventuate if investment is made simple and cost effective with the finalisation of the Tasmanian Planning Scheme of paramount importance.
Maintaining the First Home Builders Grant to the original rate of $20,000 and providing infill stamp duty concessions for inner city apartments would further stimulate the industry and provide young families from Tasmania and the mainland with an opportunity to enter the property market.
The major parties should also be encouraging investment by offering a range of incentives to develop exciting new projects which could be as simple as waiving Council assessment fees or providing access to data (such as geotechnical information or existing building heights).
Development applications should trigger a referral process which allows TasWater, TasNetworks and NBN Co to forward plan their networks to avoid design delays and supply problems which our members currently experience.
Let’s make it easier for our local, interstate and international friends to invest in Tasmania, not harder.
A review of mainland property taxes is a political smokescreen which will not make it any easier for our children to purchase a home, and that is why it should be rejected.