18 July 2009
Plans for new high rise development in Burwood would be undermined by a planned five per cent levy on the project costs, according to the Urban Taskforce.
Mr Gadiel said that the industry strongly opposed the Burwood levy which would set a precedent for other areas.
Bankstown Council is also proposing a new 3 per cent tax on development.
When councils raise money in this way they have a free hand on how they spend the cash.
Theres no requirement for there to be any connection between the developments that pay the levy and how the money is spent.
For this reason, the Burwood and Bankstown levies would be more like a tax than a user-charge.
A development in Burwood could easily end up paying $2 million in local council charges if this new levy proceeds.
In the City of Sydney, the same levy is only one per cent of projects costs.
In the regional cities, levies were increased over 2007 and early 2008 – to 2 per cent in Wollongong; 3 per cent in Liverpool, Newcastle and Parramatta and 4 per cent in Gosford.
There is a clear pattern here – development levies on commercial developments have been gradually ratcheted up from one per cent to four per cent in the space of one year.
However, neither Burwood nor Bankstown are regional cities.
If they get the go ahead from the NSW Government to impose these levies, we can expect many other local councils to put their hand up for this new tax.
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.
