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Tax Forum should fix housing shortage: HIA
Released 1 August 2011

A Tax Forum discussion paper by the Deputy Prime Minister represents an opportunity for Australia to take steps towards reducing the large tax burden levied on new housing and to remedy the nation’s chronic housing shortage, according to the Housing Industry Association (HIA).    

HIA Managing Director Shane Goodwin, noted that some elements of the Tax Forum discussion launched last week paper were pleasing but emphasised that the opportunity should be taken to tackle Australia’s large housing shortage.

“HIA welcomes the opportunity to participate in the Tax Forum and emphasises that the Government could use the Forum to make inroads to Australia’s insufficient levels of housing supply,” Goodwin said.

He was positive about how the Tax Forum was committed to not changing the treatment of the family home in income support means test, reiterated the importance of improving the efficiency of housing supply, and noted that stamp duties are a highly inefficient tax while also leaving room for substantial reform to this taxation element.

However, he said much more needs to be done to reduce the tax burden placed on new housing by all tiers of government.

“Independent economic modelling by the Centre for International Economics has found that the total taxation burden on a new home can be well over 40 per cent of its purchase price,” Goodwin said.

“Worryingly, most of the taxation burden is borne by the home buyer. The Tax Forum could be used to reduce this large impost on homes and hence increase housing supply and improve affordability.”