Some taxing truth about housing affordability
Government taxes and charges on new development take up to 22 per cent of total costs when buying a home or apartment in Perth, according to new research released by the Property Council of Australia.
Across Australia’s capital cities, government taxes and charges represent between 17 per cent and 25 per cent of the acquisition costs of houses, and between 17 per cent to 22 per cent of the acquisition costs of apartments.
In Western Australia, the research finds that for single house development, Government taxes and charges account for 22 per cent of total acquisition cost and apartments account for 19 per cent. This far outweighs any other major cost component of purchasing property outside of the cost of construction.
One of the taxes included is the stamp duty surcharge for foreign investors, which is proposed to be increased from 4 per cent to 7 per cent. Property Council continues to advocate strongly against this proposal as it would only add to the already significant cost of purchasing property in Western Australia and potentially deter investment at a time we desperately need it.
The report also considers alternative infrastructure funding mechanisms and their relative advantages and disadvantages; along with identifying some best practice principles for infrastructure charging. The Property Council WA intends to consider these questions in more detail in coming months and will keep members involved and informed as we do this.
We also continue to liaise with the State Government on the status of its review of State Planning Policy 3.6 Development Contributions for Infrastructure, which we understand is soon to be readvertised for comment, and we will continue to ensure that the real impacts of excessive charges are understood and the important insights of this recent research reflected in the recommendations.