Housing Industry Association senior economist Shane Garrett has argued that the investment tax measure used in Auckland is not the best solution for Sydney’s housing boom.
New Zealand has set a 33% tax on investment properties bought and sold in two years in the hope of controlling house values and foreign investment activities.
The same dilemmas face Sydney’s housing market, but Garrett said the city already has similar measures in place to address them.
“We have a similar idea in Australia where if you hold an asset … for more than 12 months you receive a 50 per cent discount on your capital gains tax, which encourages people to hold on to assets for longer,” he was quoted as saying by Real Estate Business.
“This rule, which has been around since 1999, penalises people for holding assets for less than a year.”
He acknowledged as well that “excessive taxation and a slow planning system” contributed to rising property prices.
“There are massive amounts of taxation on building a property – infrastructure tax, GST, stamp duty and other various taxes – which means that of the final purchase price, about 35 per cent is accounted for by taxes.