As we navigate the current housing boom in Western Australia, it is critical that housing affordability is maintained to ensure those looking for a home can find something that suits their lifestyle and budget.
With that in mind, keeping property taxes in check is critically important.
It is no secret that property taxes have a significant impact on housing costs. For example, stamp duty can add tens of thousands to the cost of purchasing a home.
Other taxes, such as on large landholdings and during rezoning, can also add significantly to the cost of development and therefore to the end price of a new home.
Concerningly in Victoria we have just seen a raft of new property taxes introduced that will push up housing prices in that state.
Specifically, the Victorian Government has introduced three new or increased taxes, including a lift in stamp duty, increases in the land tax rates for holdings and a new rezoning tax.
This is not good news for Victorians, and we certainly do not want to see our State Government follow suit.
Not only do these taxes push up residential property prices, but they can also severely hamper new housing projects in key areas and jeopardise thousands of jobs in construction and other associated areas that are so important to our economic recovery following the impacts of the pandemic.
After all the hard work the Federal and State Government have done to boost the new housing market with the HomeBuilder and Building Bonus stimulus measures, helping many Western Australians into homeownership over the last 12 months, it would be a shame to see those efforts go to waste.
A new rezoning tax, in particular, will simply make it harder to get complex projects off the ground, leave potential project sites sitting idle and make the reduced number of homes that are built more expensive.
The ultimate price of these new taxes is, of course, paid by homebuyers and is the opposite of what states should be doing to improve housing affordability at this time.
Often government see the property industry as a soft target to boost revenue, however the fact is the raft of taxes and charges on new housing already comprises up to 50 per cent of the cost of new housing in some jurisdictions.
Stamp duties, land taxes, infrastructure charges and other contributions are already included in the cost of new housing.
We certainly hope Premier Mark McGowan will recognise this and resist any temptation to do the same here in WA.