Tax reform and slashing red tape could drive down Tasmania's sky-high house prices, a building industry group says.
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The Housing Industry Association said recent research it commissioned found up to 30 per cent of the final price of a house and land package in Hobart was due to upfront taxes and red tape from various levels of government.
That would equate to about $180,000 of a $600,000 buy.
"This is ... a significant cost impost on new home production and affordability," the HIA said in its 2024-25 state budget submission.
"As such, reform of the Australian taxation system - and of the Tasmanian government's current tax arrangements - is considered a priority and would show recognition of the impact upfront and hidden taxes are having on housing supply and home ownership."
The HIA said it supported the removal of "inefficient and inequitable" taxes like stamp duty and payroll tax on the construction of new housing, and replacing them with "broad-based community taxes".
It also called for new housing to be exempted from the GST.
The HIA said state government investment in the housing area must focus on productivity to enable greater housing supply.
It suggested the money should be spent on:
- Stimulus, including first home owner grants;
- infrastructure;
- skills;
- red tape reduction; and
- tax reform.
The HIA said Tasmania's building and construction industry had continued to perform strongly "post-COVID", despite supply side constraints including the availability of materials, skills and land.
"These challenges have caused delays and cost increases, while putting pressure on builders with fixed price contracts," it said.