The Economic and Social Research Institute (ESRI) emphasized the urgent need for the Government to implement the residential zoned land tax without delay. This levy, set to begin in February next year, aims to address the high costs associated with land prices, which can contribute up to 20% of the final cost of a home.
The ESRI highlighted that lowering these costs is crucial to reducing the price of building houses and apartments. The tax is also seen as a way to combat potential land hording issues. Minister for Finance Jack Chambers and the ESRI are working on proposals to exempt active farmers from the tax.
Furthermore, the ESRI predicts a similar number of new homes being built this year compared to last year, with an increase to 37,000 units in the following year. Despite remarkable economic growth, the ESRI cautioned against overheating the economy by injecting more money and advocated for a neutral tax package to help workers cope with the rising cost of living.
The ESRI’s economic forecast predicts a strong domestic economy with growth rates of 2.3% this year and 3.1% next year, alongside a low unemployment rate of about 4%.