Tax breaks 'key to easing housing crisis'

Its great to see something on this, however may come a few months too late for me..

I wonder how many people are attempting to use this opportunity to drive prices up again like last time with the introduction of the grant.... As most people making these decisions are wealthy and would own a few properties, if they get it wrong and push up prices, it only lines their pockets...

Bad for society, good for them...

 

We seem to forget that the CGT Discount was introduced to replace the Index Method.

The Index Method attempted to tax the 'real capital gain' by allowing you to inflate your historical cost base by the CPI increase during ownership - a sound economic and taxation policy to only tax 'real wealth'.

Supposedly to "simplify" tax calculations, this was dropped and the discount introduced for everybody except companies. However, it encourages people to churn after 12 months.

Tax deductible PPOR loans sound a bit like the US system ? What a stunning success they have at the moment.

The real anomaly of Australian Taxation Law is negative gearing. Most tax jurisdictions are more schedular, and excess losses are carried forward until future income from that class. However, previous attempts to stop this by Paul Keating resulted in a very quick backflip. Therefore I would expect no politician to be brave enough to tackle this one.

I am no supporter of interventionist policy, but the Australian Government uses Taxation Law as an instrument of fiscal policy just as much as grants etc. Therefore I think it should take a step back and look at the whole economic process from the start.

Unfortunately, I expect more fiddling around the edges with lots of noise about how good the politicians are in the run-up to the election. POLICY-ON-THE-RUN !!!

Cheers,

Rob

 

Grumble grumble. Our FHOG grant was a few pissy grand on a 1br dogbox in Glebe.

Subsequently we bought after the great housing boom, $670k mortgage, 30 y.o. Paid enough stamp duty to employ a public school teacher/fireman/cop for 9 months.. we paid our dues.. if we had to cough that up, everyone should!

Should my taxes subsidise their lifestyle decisions?

Why is home ownership a necessity anyway? Shelter is, but whether it's bought or rented is irrelevant, conceptually if not emotionally...

 

I think people have to lower their expectations when buying their first house. Instead of a 500 - 700k McMansion, I think people should be looking at more affordable properties. For my first house I bought a 180k 2 bedroom unit 20-30 minutes from the centre of Hobart. In the capitol cities of Australia there must still be suburbs where people can buy a modest unit or house and live within their means.

 

There still are affordable areas of Sydney and Perth etc, people just need to manage their expectations and their budgets better.

We all seem to want to buy where are parents are at. We forget that our parents traded up over a period of 20 years..

 

Glebe, many of the affordable areas (in Sydney at least) are places of high-crime, poorly educated or dysfunctional families. One reason some FHB don't want to purchase the cheapies isn't because they're too selective, it's because the environment certainly isn't "good enough".

Without having to get up on my soap box, I think every Australian deserves affordable housing options where environments are at least safe and clean (in that order of importance). The NSW government should recognise that affordable housing areas exist, then work to clean these places up to be more attractive (ie lower crime/drugs/build communities). Any tax/monetary incentive is only going to drive up demand.

 

Absolutely right, these incentives merely drive up demand. I haven't heard much about the supply side in any debate ?

I think this has been dumped (along with other infrastructure issues) in the 'too hard basket'.

The reason people don't want to buy in the cheaper outer reaches is that there is NO infrastructure. This marginalises them further as they must commute large distances (fuel, tolls, congestion) and are denied essential services.

Our first house was the typical 'worst house in the best street' scenario. We called it the Love Shack, it was close to shops, schools, buses, railway and arterial road. It also had a lot of older people in the street who kept a watch out, and even did our lawns while we were away.

Because our expectations were low regarding the quality of the house (the block was excellent development potential) so we only needed to borrow twice my annual salary.

To me, that is the ideal scenario that first home owners should aiming for. But first you need the infrastructure to encourage people to settle there, not just a subdivided field 100km from your workplace and 20km from shops & school !!!

Cheers,

Rob

 

I'm not sure that housing affordability is in the end something that our government(s) can or should control.

When I grew up in the 70's I think the average house size was 12 squares, I think its now up to 25 (jacque could no doubt correct me here). I don't state this as an economic indicator, but rather as a indicator of how we have changed in our living and lifestyle wants. We seem to want bigger and better and want it now.

It seems to me that if you want something enough then you'll find a way to get or achieve it.

 

I think this suggestion is silly.. giving people more to spend in any form, ie tax deduction or grants etc is only going to increase the price of existing housing which only benefits current home owners and investors.. not new people trying to get a home which is who they are supposedly trying to help.

Problem is supply, full stop. increase supply, and prices will stabilize which would be the best result for all.

 

These type of schemes will help housing affordability.

Land hope as city bursts its seams | Herald Sun

 

Couldn't agree with you more. Note also that as the size of a house has gone up, persons per house has decreased.

Whenever the topic of housing unaffordability comes up, I think of my parents who moved to Campbelltown to find cheap housing to bring us up when we were kids. Noone in my social group would be prepared to make that move now, they'd rather complain that Coogee is too expensive.

 

I have friend who live in Pyrmont which is a 20 minute walk from their work, however they wont move to Straithfield/Hurstville which are still 20 minutes from their work (via train) as it will take them too long to get to the city... Some people just look for excuses

People have unrealistic expectations, however in saying that, outer suburbs arent really much of a choice if you work in the city.. You think about 10+ hour days plus an hour travel each way is practical? In saying that, my parents did the exact same thing...