Inefficient tax slugs all homebuyers

Bryant, Lyndall (2015) Inefficient tax slugs all homebuyers. The Conversation.

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Abstract

Housing affordability is more than just house prices. It also includes ready access to public transport, schools, good road networks, and of course access to all the basic utilities. However, local governments don’t have the money to build all the infrastructure new housing estates need.

So developer charges were introduced as a “user pays” method of funding new urban infrastructure. These charges are levied on property developers by local authorities at the time of planning approval. Some think these costs are passed back to the original land owner by way of lower land prices.

But property developers claim these charges are instead added on to new house prices, with a negative impact to housing affordability. When new house prices increase, existing house prices are also dragged up, extending the housing affordability issue throughout the community.

However, new research by QUT has uncovered evidence that these costs are not merely passed on to homebuyers, but are passed on at significantly over-inflated rates.

In an Australian first, the study empirically examines the impact of developer charges on housing affordability, providing evidence that developer charges are passed on to all homebuyers in the community. So while policy makers think they are charging developers for the provision of infrastructure in new communities, the cost is really being borne by all homebuyers.

Impact and interest:

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ID Code: 87037
Item Type: Journal Article
Refereed: No
Keywords: Infrastructure charges, Housing affordability, Inefficient tax
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > URBAN AND REGIONAL PLANNING (120500) > Urban Analysis and Development (120507)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > COMMERCIAL SERVICES (150400) > Real Estate and Valuation Services (150403)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Deposited On: 01 Sep 2015 02:56
Last Modified: 01 Sep 2015 23:08

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