News Service from House Harris

NSW: Levies need to be removed on new homes, says developer.

SYDNEY, Nov 8 AAP - The NSW government's extra3,000 for first-time home buyers is unlikely to stimulate the ailing housing market without changesto crippling levies, critics say.

The economic sweetener, to be announced in Tuesday's mini-budget, takes theNSW First Home Owners Grant to10,000 and can be added to recent generousincreases offered by the federal government -14,000 for established homes and21,000 for newly built houses.

Premier Nathan Rees said the boost in grants, combined with the fall in interest rates, would make buying a home more affordable and be a shot in the arm to the construction industry.

The extra3,000 would be available to about 3,000 first home owners for one year before being re-assessed.

"This grant is a further9 million investment in the NSW housing sector and will be fully-funded by the NSW government in the upcoming mini-Budget," he said.

Mr Rees also said that from July 1 next year the First Home Owners Grant scheme would be capped for properties valued up to750,000 - similar to that announced by Queensland.

Urban Taskforce chief executive Aaron Gadiel said today stamp duty and levies imposed on new homes made it financially unviable for developers to build.

"The state government routinely charges a40,000 levy on any home at all built in areas for urban expansion.

"These levies are being paid by the developer.

"The developer won't build the homes unless he can be satisfied the homebuyer can pay the levies."

Mr Gadiel said in September this year, seasonally adjusted home approvals in NSW fell by 26 per cent compared with the previous month, while Victoria saw only a four per cent fall.

"In NSW anti-development sentiment and higher development costs have meant a more rapid fall-off in investment than in other states."

He said a lack of new housing supply was contributing to skyrocketing rental prices. First home buyers struggled to save a deposit for their own home.

In Baulkham Hills, north-west Sydney, Mr Gadiel said rent had increased by 20 per cent in the last financial year.

"That's because it has not been possible for much land to be developed," he said.

Opposition leader Barry O'Farrell said the Rees government "had to get serious about reducing taxes and levies" to kick-start the NSW property market.

"We need lasting solutions for the sector," he said.

First home owners will be able to apply for the extra grant from November 11.

The grant will operate for one year, after which the government will re-assess it.

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