Labor announced it would allow first home buyers to purchase homes with a 5 per cent deposit. It also pledged $10 billion to go towards building 100,000 new homes over eight years — exclusively available to first-time buyers — by way of grants to states and territories, and zero-interest loans or equity investments.
The Coalition’s policy would see interest payments on mortgages taken out by first-time buyers on newly built homes be tax deductible for five years.
Economists have been quick to give scathing assessments of some of the latest policies, which they argue will drive up demand, and in turn, housing prices. Chris Richardson labelled the major parties’ platforms a “dumpster fire of dumb stuff”, while Saul Eslake called the Coalition’s planned tax deduction “candidate for dumbest policy decision of the 21st century”.
But housing experts say the policies are missing the crucial issue driving the housing shortage.
Of the 2, the LNPs tax deductible interest is the much better plan. It definitely could help, but it does nothing to make housing for affordable.
The ALP plan also does nothing to make houses affordable.
Both parties are trying to maintain the housing markets perpetually increasing prices because if the bubble were to burst it would be catastrophic. It’s getting to catastrophic levels if it doesn’t burst though, but wealthy politicians who own multiple homes and are set for life don’t care about this type of catastrophe, only the former one.
Interesting that in an article about issues with housing supply there is no mention of the unsustainable population increase via record levels of immigration.
All three of your comments are just trotting out the established conservative talking points.
The LNP’s deductible interest is a terrible plan. You haven’t suggested why you think it’s better than the ALP’s plan. Both plans will increase the cost of housing.
As regards LNP specifically, home ownership already attracts obscene tax concessions in that your home is exempt from CGT. In terms of someone’s stage of life financial cycle, the LNP’s plan dramatically heightens the imperative to buy a home in your 20s and 30s. If you don’t, you miss out on those tax concessions, which are effectively the ATO paying off a big chunk of your investment.
Ah yes, the classic talking points of….checks notes…. saying the conservative partys policies are bad. Interesting take. I’m going to go out on a limb and guess that you disagree that immigration is a factor in the housing crisis, right?
The deductible interest idea is actually a good idea, not just for first home buyers but for all mortgages. It massively helps ease cost of living pressure that is brought on by interest rates on housing. Many countries already do this btw.
Home ownership doesn’t attract obscene tax benefits.
You know what is an absurd tax? Land tax, which you’re advocating for making a standard and increasing.
Let me guess - you think communism works, it just hasn’t been done properly yet?
I didn’t say all conservative policies are bad, I rebutted your assertions.
You don’t really seem able to back up anything you’re saying. It’s all meme level vibe based reasoning.
Tax deductible interest on mortgages would just increase the cost of housing. Dramatically. Well done.
Land tax is well established as broad based with minimal compliance cost.
Well, yes… They have been for decades, it’s why we’re in this mess, fuck voters :)
Vote #Green
Vic socialists policy’s seem to be better for the average renter than the greens. In my electorate, voting greens means voting for someone that prefers crystal healing to vaccines.
I absolutely agree that both parties’ housing policies are just throwing fuel on the fire.
Assisting first home owners increases demand which increases pricing. The obvious beneficiaries of these policies are people that already own houses.
The solutions are addressing tax concessions like negative gearing and capital gains tax, increasing annual land tax, and providing concessions for tiny homes and pre-fab homes.
The best solutions are to stop foreign ownership completely, massively cut immigration temporarily (importing a million people a year when we have a housing supply crisis is literally pouring fuel on the fire), limit how many properties someone can own, remove negative gearing, and slash lots of red tape and costs associated with building multiple homes on peoples land.
Annual land tax should not be a thing. You bought it, it’s yours. Paying a “land tax” forever means you’re just renting the land with extra steps.
As you touched on, they need to completely rewrite the book on tiny homes etc. I want to build a granny flat/tiny home on my property to move my parents in to and sell their house. To do so, my council charges something stupid like $28k in non refundable application fees. I could pay $28k to apply to build a granny flat and they deny it and keep all that money. That is absurd. I’m trying to get a property sold and re-house my parents onto my land, and the council is telling me to get fucked, basically.
Annual land tax is the most broad based, low-compliance-cost tax there is.
Before the advent of the internet it would’ve been possible to replace most taxes with a hefty land tax, and it’s well researched and document amongst economists.
You suggest cutting foreign ownership, and limiting the number of properties a person can own, and land tax is the obvious and most effective way to address those things.
The red tape and council regulations around multiple dwellings on a title are required to maintain living standards and avoid slum-style accommodation.
Usually with hefty application fees you can do your due diligence and be pretty confident your application will be successful.
Land tax doesn’t address those things. Land tax is a constant tax on something you already own. Land tax harms every home owner, including the poorest of them. That should never have even been allowed, let alone have anyone advocating for it to be expanded. Being low compliance and broad based doesn’t mean it’s right.
It should not cost $28k in fees to then buy a fully compliant off the shelf tiny home. It has absolutely nothing to do with maintaining living standards. 28k in application fees makes it an expensive exercise, sometimes doubling the cost of the dwelling you want to put there. That is absolutely absurd.
Tax the fuck out of people who own multiple residential properties.
Drastically reduce the attractiveness of buying a property to purely rent it out on AirBnB.
Yep. That’s what I said.
I sometimes wonder how things would look today if Shorten won in 2019 and some negative gearing and CGT changes had been made…
Bad, but not as bad?
Yeah. Taxing investors is going to take the heat out of the market. The only question is how much.
It was a broad progressive platform. I remember how disappointed I was when he lost.
