How do you lower house prices? Stop charging GST on houses.
The average NZ house price costs $631,147.
So the person who buys that house pays $94,675 or 15% tax.
As a builder/developer, the first thing we do when we sell a spec house i.e. where we purchased the land, built a house and sold it completed – is we hand the IRD a cheque for 15% of the sale price.
What that means to your average NZ home buyer is that you are being charged 15% tax when you buy a home. Oh, and don’t forget that you are buying with ‘tax paid’ dollars i.e. you have worked, paid income tax, saved money and then when you buy a house you pay tax again.
Now you know why governments love property booms, they make a huge tax windfall.
So how do you lower the cost of building new houses by 15% over night? Easy, you remove GST on home building.
John Kenel, Assured