Councils desperate to keep $75,000 impost on each home

04 May 2009

Todays announcement that local council development levies of more than $20,000 a home will continue, shows that high-taxing councils are fighting hard against reform, according to the Urban Taskforce.

The Taskforces chief executive, Aaron Gadiel, said that there would be no economic recovery in NSW unless chronically high local council development levies could be brought under control.


In December last year the NSW Government said that it was “capping infrastructure contributions payable to local councils at $20,000 per lot”. However, it also said “all contributions exceeding $20,000 [will require] approval from the Planning Minister”.


The government set a deadline of 30 April 2009 for any exemptions from the $20,000 cap to be decided. The NSW government today announced that 28 councils (listed below) will be able to continue to impose levies beyond the $20,000 cap. The Minister for Planning, Ms Keneally, now says that all exemptions will be resolved by the end of May.


Its not surprising that the original deadline has not been met, Mr Gadiel said.


Local councils are fighting tooth and nail to hold onto their massive levies on new home construction.


Council levies work against the Federal Governments $21,000 first home owners boost.


For example, the Baulkham Hills Council wants to slap a $50,000 levy on each new home in North Kellyville, and Pittwater Council is levying $75,000 from each new home in Warriewood Valley, with an increase to $90,000 planned for 2011.


As long as these exorbitant charges continue it will be difficult, if not impossible, to develop houses in NSW.


Mr Gadiel said the development picture in NSW has been grim.


The trend estimate for new home approvals in NSW has fallen for 15 straight months, with a total fall of 40 per cent over this period.


This follows a steady decline in NSW home construction since 2002.


In 2002 work started on 48,000 homes, by 2008 this figure has almost been halved – with work starting on only 26,900 homes.


Despite Victorias smaller population base that state has been building houses at more than twice the rate of NSW and local council levies are capped at much lower levels than NSW.


Local councils should never have been given the right to exceed the cap on levies imposed by the NSW Government.


We recognise that Ms Keneally has now committed to resolving the outstanding local council levies by the end of May, but we know that the councils will try every political trick in the book to get around the governments cap.


If these high levies persist NSW will not see the home construction it desperately needs to tackle serious economic and social problems.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers. For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.


The local councils that have, for now, been exempted from the governments cap on new home levies are:

  • Bathurst Regional Council
  • Blacktown City Council
  • Camden Council
  • Campbelltown City Council
  • Coffs Harbour City Council
  • Council of the City of Sydney
  • Great Lakes Council
  • Hawkesbury City Council
  • Holroyd City Council
  • Ku-ring-gai Council
  • Lake Macquarie City Council
  • Lane Cove Municipal Council
  • Leichhardt Municipal Council
  • Liverpool City Council
  • Maitland City Council
  • Manly Council
  • North Sydney Council
  • Palerang Council
  • Penrith City Council
  • Pittwater Council
  • Port Macquarie-Hastings Council
  • Shoalhaven City Council
  • The Council of the Municipality of Hunters Hill
  • The Hills Shire Council
  • Tweed Shire Council
  • Wollondilly Shire Council
  • Wyong Shire Council
  • Yass Valley Council

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