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The House of Representatives Standing Committee on Tax and Revenue released its final recommendations that the government can undertake to boost housing affordability following its inquiry into housing affordability and supply in Australia.<\/p>\n
The report outlined several recommendations on the supply and demand sides, which involve policies on taxes, funding, and government support.<\/p>\n
Policy changes to support demand<\/p>\n
CoreLogic research director Tim Lawless said one of the biggest recommendations is convincing state governments to adjust their stamp duty policies<\/p>\n
\u201cState governments should replace stamp duty with land tax, phased in over time \u2014 this change would support housing turnover, remove unnecessary obstacles to home ownership and stabilise government revenues,\u201d he said.<\/p>\n
Over the 2019-2020 financial year, stamp duty on conveyances comprised 18.1% of all state and local government revenue. The surge in house prices over the past year could have potentially boosted this figure through the recent financial year.<\/p>\n
Mr Lawless said stamp duty in NSW, for instance, are adjusted each year in line with movements in the Sydney consumer price index (CPI).<\/p>\n
Over the past decade, Sydney\u2019s CPI has increased by a total of 21.8% while housing values have more than doubled, up 109.5% over the same period.<\/p>\n
\u201cThe result is a significant amount of bracket creep that has pushed roughly half of Sydney dwelling sales over the past year into the highest stamp duty bracket where home buyers are lumped with a minimum of $42,240 plus $5.50 for every $100 over the upper threshold amount of $1,043,000,\u201d Mr Lawless said.<\/p>\n
\u201cSince the NSW government conducted a review into stamp duty reform, which specifically involved a transition away from stamp duty towards the option of a perpetual land tax, the state treasurer has noted a move to a land tax regime is one of many options.\u201d<\/p>\n
Another recommendation is allowing first-home buyers access their superannuation as a form of collateral on a home loan.<\/p>\n
Mr Lawless said this would provide some first home buyers with a substantial head start in accessing the market.<\/p>\n
\u201cAt first glance, allowing anyone to use their superannuation as a home loan guarantee would presumably most benefit high income earners \u2014 to make a scheme more equitable, its implementation may include income caps or a maximum on the value that can be used as collateral,\u201d he said.<\/p>\n
\u201cAnother factor helping to offset the risk of super as part of first home purchases is that home ownership is recognised as a key pillar of retirement wealth.\u201d<\/p>\n
Recommendations to boost supply<\/p>\n
On the supply side, Mr Lawless said one of the biggest recommendations is for the federal government to incentivise and guide strategic planning outcomes at the state and local government level.<\/p>\n
\u201cAn example would be financial assistance for better state planning policy and administration of that policy, as well as rewarding better policy administration such as a more streamlined approvals process or bringing infrastructure contributions in line with social costs,\u201d Mr Lawless said.<\/p>\n
Another proposed policy involves implementing federal government schemes supporting private sector delivery of affordable housing options.<\/p>\n
\u201cThis could include rent-to-own options providing affordable home ownership to disadvantaged members of the community such as low to medium income earners, people experiencing homelessness and women escaping domestic violence,\u201d Mr Lawless said.<\/p>\n
Other supply-side recommendations include:<\/p>\n
\u00b7 Higher dwelling densities in appropriate locations, such as areas with underutilised transport infrastructure<\/p>\n
\u00b7 Provide of grants to the states and local councils for delivering affordable housing supply<\/p>\n
\u00b7 Reform developer contributions<\/p>\n
\u00b7 Conduct a review into build-to-rent markets<\/p>\n
\u00b7 Support the concessional loans from National Housing Finance and Investment Corporation (NHFIC) to fund infrastructure projects and community housing providers<\/p>\n
\u2014<\/p>\n
Photo by @dhyamis on Unsplash<\/p>\n<\/p><\/div>\n