- REIA advises governments to cut various taxes, build houses and make a national plan
- Stamp duty highlighted as major barrier to buying home
- Recommendations submitted to national inquiry on housing
As strong price growth pushes homeownership ever further out of the reach of everyday Australians, the Real Estate Institute of Australia (REIA) has submitted three recommendations to the federal inquiry on housing affordability and supply.
The inquiry is being conducted by the House of Representatives Standing Committee on Tax and Revenue.
REIA President, Adrian Kelly explains that they are calling on the government to address these key issues which will help Australians to achieve homeownership.
“Our three recommendations are axing taxes on Australian homes, building more houses and implementing a national plan for housing,” Mr Kelly said.
1. Tax cuts
Mr Kelly explains that buying and selling homes is highly disincentivised for both owner-occupiers and investors due to stamp duty.
“Stamp duty is a major deterrent for Australian investors as well as those struggling to buy a home with lower investor activity putting upward pressure on rentals,” Mr Kelly said.
Stamp duties on houses consume a significant share of average annual earnings.
Rates are worst for house buyers in Darwin (30%), Hobart (28.5%), Adelaide (27.8%) and Canberra (26.8%).
For those buying units, Melbourne and Sydney leads a long way in terms of stamp duty. Though it made up a significant portion of earnings unit buyers in Adelaide (21.2%) and Hobart (20.7%) too.
In addition to reconsidering stamp duty levels, Mr Kelly proposed that interest rates should be made tax-deductible for first home buyers.
He also encouraged the removal of the capital gains tax (CGT) to be considered for second residences and investment properties.
“By reducing and eliminating antiquated taxes, we will encourage more activity in the market place which will balance out both affordability and supply issue.”
Adrian Kelly, REIA President
2. Building homes
Total national property listings have steadily fallen over the twelve months. They currently sit at 200,000 which is a record low based on SQM’s data.
The recovery of migration rates in the coming months is expected to add fuel to the fire.
“As migration returns to normal, demand is expected to exceed new supply which in turn will further highlight the critical relationship between supply and affordability and new dwellings will be needed,” Mr Kelly said.
3. National plan
The third and final recommendation from REIA was for a national plan for housing to be constructed by State and Federal governments.
The plan should identify targets and benchmark performance levels for housing supply.
Annual progress should be tracked and reviewed according to REIA.