20 December 2010
The NSW Government has today released a policy paper flagging new taxes on homes, just five days before Christmas, according to the Urban Taskforce. The NSW Government today released its Affordable Rental Housing SEPP Review discussion paper. The paper reversed the previous NSW Government position, and now proposes an examination of the financial feasibility of additional ˜affordable housing levies.
The paper flags that the existing levies that only apply in Willoughby City Council and in the City of Sydney could be extended more generally. The current levies only apply to several small areas, and range from between 0.8 per cent and 4 per cent of the value of a new home.
The Urban Taskforces chief executive, Aaron Gadiel, said that, until now, government policy had prevented new affordable housing levies from being imposed outside of Willoughby and certain areas within the City of Sydney.
The levies make new homes more expensive, so that a small number of rent-controlled homes can be built and operated by local councils or non-profit organisations, Mr Gadiel said.
How can new housing levies possibly be the key to boosting affordability?
An extension of these existing levies across NSW will see new home buyers subsiding costs of a rent control scheme that only a tiny few will ever benefit from.
These costs could amount to an extra $24,000 for a $600,000 new apartment.
The plan taxes young families struggling to buy a home of their own to subsidise those who are renting.
Not all renters benefit only those lucky enough to win a place in one of the small number of rent control homes that schemes like this produce.
Many will miss out.
Its entirely appropriate that government and local councils take action to help renters but the last thing they should be doing is introducing new taxes on home buyers.
Theres no such thing as a free lunch.
You cant create new homes with subsidised rental unless someone is paying for them and the state government is proposing that new home buyers bear this burden.
Any subsidies for struggling renters should come from the government, not from other home buyers.
Mr Gadiel said the review on the existing ˜affordable housing state environmental planning policy would be welcome, if didnt include the threat of new taxes.
The policy was introduced in 2009, and relaxed prohibitions on more compact home development near public transport.
However, it was primarily directed towards those in public housing and tenants of community housing organisations.
Around 90 per cent of the 4,000 odd dwellings approved under the policy have been public housing funded through the federal economic stimulus – and, as a result, has taken none of the heat out of the mainstream rental market.
The policy hasnt helped tenants leasing directly from private landlords and those who want to make the transition to home ownership.
210,000 Sydney households are theoretically eligible to occupy rent control housing facilitated by the policy, but very few have benefited from it.
Mr Gadiel said the existing schemes focus on rent control, and the exclusion of affordable housing for owner-occupiers, meant that investment in the scheme has been too modest.
So far, this is a niche policy, which sees, at best, a small amount of additional development to accommodate some lucky renters, he said.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
Important note: In a story titled Proposed home levy dumped after developer pressure (published 21/12/10; the day after this media release was issued) the Sydney Morning Herald reported that the government has now ruled out any levies or taxes to pay for affordable housing.
