“In some states the total tax bill amounts to over 40% of the final price of a new home,” says HIA managing director Shane Goodwin.

“Taxes on new housing are a brake on economic activity, and represent a constraint on housing affordability and labour productivity.”

The report by the Centre for International Economics (CIE), commissioned by the HIA, finds that new housing is the second most heavily taxed of Australia’s largest sectors, being those valued over $10 billion. A majority of the taxes are inefficient, with stamp duty clearly demonstrated to be one of the biggest offenders.

“Stamp duty is particularly inefficient, but it is not alone as an excessive and inefficient tax, which acts as a disincentive to one of the fundamental tenets of Australian life – the provision of shelter.

“We know that the reality is that the states and territories have to fund the services they deliver, and that the community will eventually have to pay somehow.

“What we are saying is that it should be through an efficient and broad based means which doesn’t unduly penalise the residential building sector.

“Housing is a staple of life, and without adequate and affordable housing it is impossible for many in the community to contribute economically and socially to their full potential.

“It is therefore incumbent on the Commonwealth to lead the process of reforming the myriad of state, local, and federal government taxes on new housing.

“HIA reiterates the position put forward in its 2012/13 pre-budget submission that in the current fiscal circumstances the Commonwealth should abandon its ‘surplus at all costs’ mentality and make sensible and sustainable investments in the future of the economy.”

“Reforming inefficient taxation on housing is an investment guaranteed to pay a dividend,” says Mr Goodwin.