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Major home builder G J Gardner has welcomed the Reserve Bank's turnaround on mortgage restrictions for new house builds, but says the Government should act too.
Grant Porteous, managing director of the firm's master franchise, said the central bank's decision to exempt house builds from the clampdown on low equity mortgages would ensure the residential building recovery would continue.
"We're extremely happy to hear of the changes and it is not something we had anticipated to happen."
However, if the Government was really serious about housing affordability, it should also consider a GST exemption, or reduction for new homes, he said.
"For example, if the average Kiwi purchases a house worth $600,000, they end up paying $90,000 in GST."
Jeff de Leeuw, a G J Gardner franchise owner in Hamilton, said his company had received a lot of calls since the bank's low "loan-to-value ratio" (LVR) policy was introduced in October. It had had to turn opportunities down because people didn't have the deposit required.
The exemption freed up that work, he said.
Harcourts chief executive Hayden Duncan called the move a "wise decision" given the huge demand for development, particularly in Christchurch and Auckland.
"To jeopardise the construction of thousands of new houses through LVR restrictions is detrimental to what the Reserve Bank is trying to achieve, and [Reserve Bank governor] Graeme Wheeler should be given credit for listening to the building industry and going back on this original stance."
A growing population and limited development meant building new homes were the only way to temper high house prices, he said.
- © Fairfax NZ News