The Housing Industry Association (HIA) has shown its full support for the government’s decision to make no changes to the capital gains tax (CGT).
Graham Wolfe, HIA’s chief executive of policy and media, said the announcement made by Prime Minister Malcolm Turnbull earlier this week is welcomed by the residential building industry.
“New housing is one of the most highly taxed commodities in the Australian economy,” Mr Wolfe said.
“Over recent months there has been a range of proposals, from reducing the CGT discount on investment properties to applying the tax on the family home, and [this week’s] categorical statement by the government provides certainty to the industry and to investors.”
Mr Wolfe said the proposed changes to reduce the CGT would negativity impact the industry and push investment away from Australia’s housing sector.
“The housing industry has opposed changes to the way capital gains are currently treated on investment properties. It would mean investors pay even more tax,” he said.
“Right now, around two dollars out of every five that an individual pays for a new home is tax.
“Buyers pay for those taxes. 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 reiterated that the HIA has stressed that “housing cannot be asked to pay even more taxes”.
“When it comes to improving affordability, the focus should be on increasing housing supply, and this won’t happen by increasing taxes on housing,” he added.