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Prime Minister Malcolm Turnbull’s announcement that there will be no changes to capital gains tax on housing has been welcomed by an industry body.
The Housing Industry Association (HIA) says new housing is already one of the most highly-taxed commodities in the Australian economy.
HIA deputy managing director Graham Wolfe said there has been a lot of uncertainty regarding tax on properties.
"In the lead-up to last year’s election, there were a range of proposals from reducing CGT on investment properties to applying the tax on the family home,” Mr Wolfe said.
“Yesterday’s categorical statement by the government provides continued certainty to the industry and to investors.”
Mr Wolfe said the housing industry has opposed changes to the way capital gains are treated on investment properties.
“It would mean investors pay even more tax,” he said, adding, “Right now, around $2 out of every five that an individual pays for a new home is tax.
“Buyers pay those taxes. And then they pay taxes on the taxes. They pay stamp duty on top of taxes, including the GST. And when they eventually sell the property, if they make any money, they pay tax on that.”
Mr Wolfe said “housing” cannot be asked to pay even more taxes.
“It would simply have the opposite effect. When it comes to improving housing affordability, the focus should be on increasing supply year-on-year. This won’t happen by removing the incentives to build new homes and placing pressure on existing housing prices to meet demand.”
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