Paul Wrigley of Ray White Toronto can see the housing and property industry suffering under the new carbon tax. Costs of building a new house will increase and will eventually affect people renting with increases in weekly rental figures. With talks of interest rate rises and global uncertainty, any activity on a property for sale should be carefully considered

Jonathan Chancellor of released the following article.

The property development industry’s pursuit of sustainable development practices is years ahead of other industries, yet this has not been rewarded with any government compensation scheme for the carbon tax, the Urban Development Institute of Australia says.

“New home buyers who make a concerted effort to embrace sustainability, such as the purchasing of energy-efficient homes, should not be subject to the effects of a carbon tax,” UDIA national president Peter Sherrie says.

“The carbon tax should not increase the price of energy-efficient new homes, whilst energy-inefficient existing homes remain unaffected.

“New homebuyers should be compensated for the increased costs of new housing resulting from a carbon tax, by a compensation scheme that extends beyond the realm of carbon emissions and rewards sustainable behaviours and practices as a whole.

“The development industry has played a major role in achieving higher levels of environmental sustainability beyond compliance in recent years through nationally recognised sustainability benchmark rating systems,” Mr Sherrie says.

The government has forgotten about home buyers, according to the Real Estate Institute of Australia (REIA) in its response to the announcement of a new carbon tax.

“The cost of construction of new housing is expected to increase by around $5000 on a new home, according to initial estimates, which can be expected to flow on to the price of existing homes,” says REIA acting president, Pamela Bennett.

“The cost of undertaking renovations for existing homeowners will also increase, with the average kitchen and bathroom renovation to increase by around 2%,” Ms Bennett says.

“When the GST was introduced in July 2000, first home buyers were compensated with the introduction of the first home owner grant.

“Similar compensation to offset the impact on increased costs of building would have been appropriate.”

The government’s proposed carbon tax will hurt homebuyers and small business without any upside for the construction industry, according to Master Builders Australia.

“There is nothing in it for homeowners, small business and the building industry,” says Wilhelm Harnisch, Master Builders Australia chief.

Based on recent independent modelling, the carbon tax is calculated to reduce total building and construction industry output by about 2.5% or $5 billion per annum.

“It is a cascading tax that will flow through the supply chain, adding cost at each point that will hit home buyers and small business,” Mr Harnisch says.

“Renters will also be caught in due course.”

 By Jonathan Chancellor
Monday, 11 July 2011