HIA and Property Council say rising levies and rates risk pushing builders and investors interstate
Two major industry groups have raised concerns about new tax and rate measures in the ACT government’s budget, warning they could drive up business costs and undermine housing affordability and investment confidence.
The Housing Industry Association (HIA) said that while it welcomed certain housing-related measures announced ahead of the budget’s release, a series of tax and fee increases would add to the already high cost of building homes.
“The reduction in the threshold for payroll tax will see more businesses pay this tax, which is a disincentive to expand and employ more people,” said Greg Weller (pictured left), HIA executive director for ACT and Southern NSW.
He pointed to a new 8% duty on vehicles over $80,000, noting this would hit builders and tradespeople hard, as many of their work vehicles exceed that amount.
“Fees that are going up include commercial waste, the building levy, traffic management fees, construction licence fees and vehicle registration,” Weller said. “Along with an increase in commercial rates, all of these will add to the cost of housing.
“The Health Services Levy will also be applied to any business that has an office or other premises in Canberra,” he added, warning the cumulative impact of the changes could push more builders to operate across the border.
Weller referred to earlier HIA-commissioned research from the Centre for International Economics showing that taxes, fees and regulatory costs make up nearly half the cost of a house and land package in the ACT.
“In the ACT, the figure is 47%,” he said. “These changes will not help that equation. We would have liked to see more support for business in the 2025/26 Budget than this. You will never tax your way to a stronger economy.”
The Property Council of Australia also expressed concern about the impact of rate increases, particularly on smaller commercial property owners and tenants.
“This is a budget that sets big and welcome targets for land release and housing – but higher commercial rates risk making it harder to deliver them,” said Ashlee Berry (pictured right), Property Council ACT and Capital Region executive director.
“While the headline increase in rates looks modest, the removal of differential rates will see many smaller commercial property owners and tenants hit with higher bills. These aren’t big players – they’re local businesses already under pressure.”
Berry warned that bracket creep within the commercial rates system was lifting costs without any sign of structural reform. “It’s hard to see a strategy here – rather, a revenue lever that’s being pulled harder each year,” she said.
“We’re calling on the ACT government to initiate a full review of commercial rates. Without this, we risk driving investment over the border and losing the very businesses that bring jobs and vibrancy to our town centres.”
Berry added that continued layering of levies on commercial property threatened the ACT’s broader competitiveness. “We want the ACT government to recognise that you can’t keep taxing a sector you rely on to deliver housing, support jobs, and build strong communities.”
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