PROPOSED INCREASED IN GST FOR HOUSING

Date 08.02.2016 The Housing Industry Association (HIA) has welcomed the Prime Minister’s hesitation over increasing the GST.
“The government is right to be apprehensive about increasing the GST on new housing, which would be a big blow to one of the bright lights of our post mining boom economy,” said HIA Chief Executive Industry Policy and Media, Graham Wolfe.

“Modelling conducted by the housing industry shows that an increase in the GST by another 5% would add around $30,000 to the price of an indicative house and land package, and over $60,000 over the life of a loan in principal and interest repayments.”

“New housing is already one of the most heavily taxed sectors of the Australian economy, with the tax burden on a new house and land package up to 44% of the final price.”
“Adding another 5% on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market, and would really put the brakes on an industry that is driving the economy in a number of states and territories.”

“As an industry that is subject to a disproportionately high level of tax – some of which are amongst the most economically inefficient forms of taxation – we welcome a comprehensive tax reform debate.”
“The Prime Minister has rightly questioned whether raising the GST to reform taxation elsewhere will provide net positive benefits to the economy. Increasing the GST on new housing will cost jobs and reduce housing affordability, putting both firmly on the negative side of the ledger.”

Source: Housing Industry Association – Media Releases