The Albanian government reaped $8.6bn for building a bomb amid the housing crisis
There are calls for a GST freeze on housing while the nation pursues 1.2 million new Albanian government homes by 2029. Photo: NewsWire / Martin Ollman.
The Albanian government reaped north of $8.6 billion in housing finance last year, as the country struggles to meet key housing affordability targets.
Australians will spend a record $95.482bn on construction costs by 2025, according to new Australian Bureau of Statistics data – with Victorians shelling out $29bn of that amount alone.
But construction industry experts have called on the government to review its tax on the housing sector, with up to $8.68bn of the country’s unprecedented spending by 2025 believed to go towards GST payments for that “essential”.
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It could cost the nation thousands of new homes as it tries to build its way out of the housing affordability crisis.
With home buyers also incurring costs from stamp duty, and their land costs being increased by land tax and other government-linked property costs, the Housing Industry Association said change is necessary if the nation is to achieve its housing goals.
Australia is in the middle of its second year of a five-year timeline aimed at creating 1.2 million new homes across the country under the National Housing Accord, led by the Albanian government.
The first year ended with about 60,000 homes short of the 240,000 needed annually to reach the goal.
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GST has been called a barrier to building homes in Australia, with estimates that at least 8600 were built with tax payments made last year.
The latest ABS data shows Victoria paid more than $29.3bn in trade fees, materials and construction costs related to work done on new home-to-homes.
As most of that money is ultimately paid by home buyers, it will also mean they are hit with the country’s largest GST bill for housing – an unprecedented $2.665bn.
NSW followed with spending of $27.432bn, followed by Queensland which topped $20bn for the first time in the country’s history.
South Australia and Perth both earned almost a billion dollars more at $6bn and $9.44bn respectively, while Tasmanians spent $1.029 billion which was slightly less than last year.
Home buyers in many Aussie states are funding billions of dollars in construction work – and GST payments.
The figures are calculated from the latest release of the ABS’s Construction Work Done data analysis, which covers construction work on jobs over $10,000 and uses surveys of builders to estimate costs incurred.
GST calculations were completed using the government’s Moneysmart calculator.
The Housing Industry Association’s chief economist, Tim Reardon, said that if even a $1m cost of housing and land was taken into account, the GST bill of $8.68bn nationally would have created around 8680 new homes.
Otherwise, it would equate to more than 17,000 affordable homes with a total price of $500,000.
HIA chief economist Tim Reardon believes housing should not incur GST costs. Photo: Tertius Pickard.
“Housing is a valuable commodity, like food, so it shouldn’t be subject to GST,” Mr Reardon said.
“And at least, until we reach the goal of 1.2 million homes.
“The fastest way to reduce the cost of building new houses is to remove the GST cost.”
Oxford Economics’ chief economist, Michael Dyer, said that while some of the increase in house building costs over the past year would be related to “expenditure on the labor side”, the construction of large and high-quality houses could also have an impact.
Mr Dyer attributed part of Queensland’s rise to an increase in $2m homes from luxury projects on the Gold Coast.
High levels of new apartment construction on the Gold Coast and rental properties in Victoria are likely to help set a record for housing construction by 2025.
Victoria is also likely to see an increase due to the high prevalence of rental properties in the country, with such properties often being furnished to a very high standard.
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