Housing Australia report predicts 40 years of unaffordable housing if action isn’t taken by government
Housing Australia report predicts 40 years of unaffordable housing if action isn’t taken by government
Stamp duty should be replaced by an annual land tax, according to a major new report.
CEDA’s Housing Australia report, which draws on the work of several academics and economists, also recommended taxing a larger component of capital gains tax.
“CEDA’s research shows that barring any major economic jolts, demand pressures are likely to continue over the next 40 years and supply constraints will continue,” said CEDA Research and Policy Committee chairman, Professor Rodney Maddock, “This is particularly the case in capital cities with a growing population and where an increasing proportion of Australia’s population are expected to reside.”
Maddock claimed the current debate over housing affordability was “centred on a few topics such as foreign investment, negative gearing and interest rates” whereas ”the issue is far more complex and without changes now, could have longer run consequences.”
Stamp duty and capital gains
According to the report, the median dwelling in Sydney and Melbourne now requires a deposit of up to four times the median income.
CEDA’s report recommended replacing stamp duty with an annual tax in order to encourage downsizing and thus more efficient use of land and housing.
Conversely, capital gains should be taxed more heavily, the report notes, because “excessively generous capital gains taxation has encouraged the flight to property and other assets.”
The report took a critical view of the ‘financialisation‘ of housing and its use in wealth accumulation, arguing that “Until our politicians are willing to work together to generate community support for such a change, the complex set of issues that define housing Australia’s affordability problems are likely to remain.”
Slamming FHB incentives
Over the past year, a number of states have taken action to help first home buyers get on the ladder.
This has included first home buyer grants in Victoria, Queensland and Western Australia, in addition to abolishing stamp duty for FHBs in New South Wales and Vic. Almost all states have also increased stamp duty for foreign buyers.
However, CEDA’s report said such policies benefited the wrong groups: “Demand side policies, such as increasing grants to First Home Buyers, introducing concessional savings schemes, or allowing access to superannuation, all aim to increase income or reduce the deposit gap. Their main effect will be to enable marginal buyers to purchase bigger homes in better locations.”
Stamp duty should be replaced by an annual land tax, according to a major new report.
CEDA’s Housing Australia report, which draws on the work of several academics and economists, also recommended taxing a larger component of capital gains tax.
“CEDA’s research shows that barring any major economic jolts, demand pressures are likely to continue over the next 40 years and supply constraints will continue,” said CEDA Research and Policy Committee chairman, Professor Rodney Maddock, “This is particularly the case in capital cities with a growing population and where an increasing proportion of Australia’s population are expected to reside.”
Maddock claimed the current debate over housing affordability was “centred on a few topics such as foreign investment, negative gearing and interest rates” whereas ”the issue is far more complex and without changes now, could have longer run consequences.”
Stamp duty and capital gains
According to the report, the median dwelling in Sydney and Melbourne now requires a deposit of up to four times the median income.
CEDA’s report recommended replacing stamp duty with an annual tax in order to encourage downsizing and thus more efficient use of land and housing.
Conversely, capital gains should be taxed more heavily, the report notes, because “excessively generous capital gains taxation has encouraged the flight to property and other assets.”
The report took a critical view of the ‘financialisation‘ of housing and its use in wealth accumulation, arguing that “Until our politicians are willing to work together to generate community support for such a change, the complex set of issues that define housing Australia’s affordability problems are likely to remain.”
Slamming FHB incentives
Over the past year, a number of states have taken action to help first home buyers get on the ladder.
This has included first home buyer grants in Victoria, Queensland and Western Australia, in addition to abolishing stamp duty for FHBs in New South Wales and Vic. Almost all states have also increased stamp duty for foreign buyers.
However, CEDA’s report said such policies benefited the wrong groups: “Demand side policies, such as increasing grants to First Home Buyers, introducing concessional savings schemes, or allowing access to superannuation, all aim to increase income or reduce the deposit gap. Their main effect will be to enable marginal buyers to purchase bigger homes in better locations.”
