GST Hike On Homes A Drag On The Economy

The Kiwi Party

Press Release December 10, 2010

Kiwi Party Finance spokesman and former MP Gordon Copeland today renewed his call for a 50% GST refund to new home buying couples.

“The nation’s economic recovery has stagnated and the Government’s decision to increase the GST on new homes, which has seen the number of consents slump, is partly to blame” said Mr Copeland.

“Even before the GST rise to 15% was formally announced in the May budget I warned that it would slow housing construction and the economy at the very moment it needed stimulus.

"It’s not rocket science. Increase the price of new housing and you will get less of it because the homebuyer has to come up one way or another with, on average, another $9,300 to cover the extra GST. Where is that supposed to come from? Savings? It will take months if not years to save that amount. A bigger mortgage? Most people, especially those building their first home, are already maxed out.

"We believe that new home buying couples should be able to claim a refund of 50% of the GST paid. Instead of paying more GST, at just 7.5% they would be paying less than the previous 12.5%.

"That would see new home building speed up, boost economic growth, provide jobs and lower the cost of housing for everyone.

“The Government has got this one wrong. It’s time to admit that and put it right”, concluded Mr Copeland.

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