Carbon slug on property repayments

MORTGAGE repayments on newly built homes could jump almost $43 a month unless housing is compensated under a carbon tax.

Spread over a typical 25-year loan for a new home in Melbourne, the total hit could top $12,800.

The Housing Industry Association says costs of making and transporting building materials would soar once a price was put on carbon.

The Gillard Government, the Greens and independent MPs are still working out the exact price and compensation.

Climate Change Minister Greg Combet recently guaranteed millions of households would be "over-compensated" for rising day-to-day living costs.

But the HIA wants compensation for the biggest single expenditure item most people ever face - their own homes.

"The Government has not addressed the impact of a carbon tax on a new home, where a family will incur a much larger cost impost and one that will hit the household budget for the life of their loan," HIA chief executive (association) Graham Wolfe said.

If the eventual carbon price is set at $25 a tonne, the HIA calculates an average family home would cost $6000 more.

The figure is based on 240 tonnes of carbon estimated to be used in manufacture and transport of materials. It does not include GST or stamp duty.

Applied to a median-priced Melbourne home of $537,522, the price hike would increase monthly loan repayments from $3258.43 to $3301.22 - $42.79 or about $10 a week.

Mr Wolfe said the figure was greater than the Governments' projections of how much a carbon tax would increase costs of life's daily essentials.

The Government says money from taxing big carbon polluters would go into compensating households, job protection and carbon reduction programs.

But the HIA warned that new house price rises would undermine the goal of reducing emissions by discouraging building of energy-efficient new homes.


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