Australia’s building and construction industry is asking for major reforms in two key areas of the Australian taxation system, which it says have a substantial impact on housing affordability, and the supply of residential housing in Australia.

Master Builders Australia (MBA) calls, as a first step, for the abolition of stamp duty on business conveyance of real property to be followed by the abolition of stamp duty on residential property.

MBA chief executive officer Wilhelm Harnisch said stamp duties are a significant burden on residential home buyers and on commercial property transactions, especially for smaller businesses.

Stamp duties have substantial adverse economic and social impacts, imposing sizeable costs on home buyers especially first home buyers looking to generate sufficient equity for their initial residential purchase, and for ‘baby boomers’/older Australians looking to change their residential arrangements.

Stamp duties also fail badly tests of efficiency, simplicity, equity and low compliance: each State/Territory has different rates and thresholds; within States/Territories different rates and thresholds can apply to different types of property; and, there are often differing concessional arrangements by home buyer type.

Infrastructure charges constitute a major cost for property developers which flow through to new home buyers.

Master Builders has identified a number of problems with the current approach of imposing developer charges for new infrastructure. Such charges reduce housing affordability, involve a lack of transparency, and result in ‘gold plating’ and hidden cross-subsidies.

The sector said it is particularly concerned at the adverse impact of developer charges on housing affordability.

Developer charges add to prices of new homes, exacerbate the under-supply of residential property, and reduce supply of rental housing, and push up rental prices, the latter of which particularly disadvantage lower income earners and/or those dependent on social welfare support.