06 March 2009
Sydney City Councils proposal to impose a tax on new homes will make housing in the city less affordable, according to the Urban Taskforce.
The Citys draft affordable housing strategy argues for an extra 8,000 new properties to be built over the next 20 years. Rents will be capped and regulated by the government. Of these, 2,000 properties are to be paid for by a levy on newly-built homes.
Home buyers will end up paying a massive amount in levies to subsidise the Councils rent control scheme Mr Gadiel said.
As much as $900 million may need to be raised by this new tax.
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 councils rent control homes. 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 thousands of new homes with subsidised rental unless someone is paying for them and the Council wants owner occupiers to bear this burden.
Any subsidies for struggling renters should come from the government, not from other home buyers.
Mr Gadiel said it was disappointing the Council had ruled out the option of allowing developers to build more affordable housing on a commercial basis.
The Councils draft strategy expressly excludes studio apartments from its definition of affordable housing.
The Councils own planning restrictions are a major barrier to the construction of new more affordable housing, Mr Gadiel said.
Thats the first thing the council should examine.
The City of Sydney restricts the supply of housing by prohibiting the development of compact, high amenity urban communities. It also imposes high cost additional building requirements above those mandated by the Building Code of Australia.
Last year an Australian Building Codes Board study revealed that council planning regulations increase the cost of building homes by up to 14 per cent, adding tens of thousands of dollars to the prices of new houses and apartments.
The board, a federal-state government agency, examined the additional requirements imposed by local councils, such as increased ceiling heights, room sizes and noise controls.
The consultants found the local government regulations led to construction cost rises from 1.5 to 14 per cent. Most local council requirements examined increased costs by between 4 and 6 per cent compared with the cost of complying with the national code.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
