Levies will make new homes dearer

The NSW Government's decision to lift the cap on local council development levies from $20,000 to $30,000 for each new block of land will make new homes dearer, according to developers.

A lobby group for developers across the state, the Urban Taskforce, has claimed NSW buyers will be $5.4 billion out of pocket.

Individual Tweed developers have declined to comment so far on the issue, while Tweed mayor Warren Polglase has warily welcomed the raising of the cap, dependent on what conditions are attached.

But Cr Polglase has rejected claims outright that the council fees charged for infrastructure such as road upgrades and facilities like parks and libraries forces up the cost of homes in the shire.

He said council fees had very little role in determining the price of new house-and-land packages.

“Developers will charge you what you can afford to pay,” Cr Polglase said.

Urban Taskforce chief executive Aaron Gadiel, however, said that the high cost of levies would make housing more unaffordable for ordinary home purchasers.

“Make no mistake, this decision will make everyday home buyers much worse off,” he said. “Less new homes will be built, those that are built will be more expensive, and fewer people will have the opportunity to own their own home.”

Mr Gadiel said NSW had hit record-low levels of housing construction every year for the past four years.

“NSW produces less new housing per head of population than any other State in Australia,” he said.

“Victorian local council development levies are below $20,000, and they're managing to produce twice NSW's level of housing despite their small population base.”

Mr Gadiel said this was the third time the NSW Government had “flip-flopped” on development levies.