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Urban Taskforce | Media Releases
Bankstowns plan to tax development will cost jobs
16 April 2009
A proposal by Bankstown council to slap a new 3 per cent tax on local development has been criticised by property developers.Development industry group, the Urban Taskforce, made the comments in response to the public exhibition of a draft plan detailing Bankstowns planned tax increase. The Urban Taskforce chief executive, Aaron Gadiel, said the new tax couldnt come at a worse time.
Construction activity is the lifeblood of the NSW economy, but right now the industry is under severe pressure, Mr Gadiel said.
In NSW, the trend estimate for new home approvals has fallen for 15 straight months - with a total fall of 40 per cent.
Commercial, retail and industrial building approvals have been in freefall for 13 months straight and are now 41 per cent lower than their level in January 2008.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy.
Bankstown Council is now considering the introduction of a new 3 per cent levy on development around the city centre, in Milperra and in other unnamed town centres.
Under the current rules, if an existing Bankstown house is redeveloped, no levy is owed to council.
However, the new 3 per cent levy will mean that a $6,400 impost will be slapped on some homes.
Anyone wanting to redevelop existing houses into dual occupancy could see their council levies jump from $6,000 to $20,000.
Dual occupancies homes with granny flats - are a moderate scale development, often pursued by average ˜mums and dads who wish to make better use of their home.
Its an attractive way for family members and/or first home buyers to secure their own home.
An exorbitant $20,000 charge will certainly damage prospects for dual occupancy of redevelopment and further stifle urban renewal.
Mr Gadiel said the charges would also hit proposals to set-up new businesses in Bankstown.
There are currently no council levies on the great bulk of commercial and industrial development in the Bankstown area, he said.
Job generating developments of this type should be highly sought after by local governments, especially Bankstown.
Under the proposals, a moderate 1,200 square metre commercial development would require a contribution of $30,000 or even as high as $60,000 within the central business district, Milperra and some other town centres.
The last thing Bankstown and NSW needs is more taxes.
Council must reconsider this proposed tax hike.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.
