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I quite liked Wales' approach of taxing second homes significantly more.
A large part of Wales' housing issue comes from English retirees buying up holiday homes. To the point people were accusing the government of discriminating against English people for the tax against properties that aren't main residences.
Easy fix then, set the criteria for not getting taxed to a formal leasing agreement.
There would have to be a minimum term for it to qualify. Otherwise, that could be worked around with a “lease” with a term of one day.
True, but the simple fact of making it a lease with all the legal protection and obligations inherent under tenancy laws would absolutely blow a hole in AirBnB's arse.
Remove negative gearing and the capital gains tax concessions then let's talk other measures.
This.
This is the easiest to administrate and provides the biggest benefit. This is the low hanging fruit.
However, after Labors bloodbath when taking it to the election in... 2017 (?) it's a political non-starter.
It's one of a long list of possible measures that the government could take but won't.
Our government is riddled with landlords. Why would they vote for policies that don’t benefit them.
The title has been edited on the ABC, and the new title is a pretty perfect summary of what I think almost anyone would have intuitively understood:
could improve Australia's housing crisis but isn't the only solution
Just tax land...
A flat land tax is a bit rough. Take some 80-year-old pensioner living in a simple house in suburbs. They've lived there for 60 years, only that suburb is now gentrified and a blanket 1% tax on the house is now a $10k/year tax bill they need to come up with (Just making up example of 1% of $1 Million property) just to stay in their own home.
This is a tough problem to figure out. I'm glad it isn't my job. Whatever the solution is, I'm sure it's more complicated that just blanket-taxing land. There'd need to be some exemptions to address this (which wouldn't be that uncommon) and other scenarios I'm too dumb to think of. And whatever exemptions are applied, would naturally lead to people exploiting them as loopholes.
I think options to defer payment until sale of the house for people with low incomes would be worthwhile, but considering the massive benefit we give to pensioners who own their own home I don't think it is unreasonable for some of that to be repaid from the sale of the house. If that same pensioner held a similar value of assets in any other form we would expect them to be fully self-funded and they would not see a cent of pension.
well, yeah. Because it's the house they actually live in, not shares or stocks.
Why does being a house they live in mean it is not also an asset? If someone prefers to rent and save up more money towards their retirement instead of buying a house why should they be penalised? If someone wants to buy an inner city appartment that is worth less and have more money put aside to pay the body corporate fees why should they get less pension than if they have a freestanding house? If someone wants to sell their house, put that money aside while they travel in a van around Australia for a few years and then buy something suitable when it is time to settle down again, why should they lose their pension compared to someone who leaves the house mostly empty while they travel so it doesn't count as an asset?
We definitely should have some consideration for the fact that this is someone's house and they shouldn't lose it because of unrealised capital gains, but we also shouldn't be creating a two-tier system which also ties people in to keeping a house which may not be suitable for them any more.
Because the value is not immediately and readily accessible without uprooting their entire life.
Tax the shit outta the sale, sure but basically penalising someone for living in their own house opens up a lot of very bad doors.
That's exacty what I'm arguing. A land tax which is able to be put off until the sale where people have low incomes. That would not penalise anyone, it just means some of the windfall gains from rising property prices go towards paying taxes rather than being a freebie to be passed on to the next generation as inheretance.
You're still playing the same issue - penalisation.
Ok, you have person A. Been living in their house for yonks, now getting taxed because real estate turned into a batshit ponzi scheme outside their window.
Low income for an pensioner? Well now the can has just been kicked on to penalise the next generation if they sell or want to move into the property.
It's going to hurt people it shouldn't, because the ones who aren't paying their dues will just find a way to skae this as well
I don't see inheritance as a right, and I definitely don't think the kids having a small amount of tax owing on the house they inherit as "penalisation".
Any tax change will involve some changes in who and how much people pay and needs to be handled carefully, but protecting inheritances should come far below paying for services: things like hospitals, schools and nursing homes. The next gereration will hurt a lot more from proposals like an income tax levy, and that will also hurt those who are not priveleged enough to inherit a house.
Yeah i don't think this is going to be the revenue stream you think it is. We're better served removing fuel excise and other business tax breaks to raise funding
... so now instead of paying $10k per year, my kids will need to pay $500k when I die? And their only way to avoid it is to move into my place and sell whatever home they currently live in? That sounds pretty crap to me.
Instead of an asset, the family home has become a liability.
I'm no expert in this stuff, I shouldn't be getting to involved in a discussion on the matter. I don't entirely disagree with you, but houses are a bit different (and the ATO recognises this fact). As everyone is very (very) aware: 60 years ago, houses did not cost $1 Million. The simple 3x1 on a quarter acre was purchased for something like $30k. The owner paid if off diligently, paid all taxes owed from income through the years and the welfare system in place at the time assured citizens that there would be a pension at the end of their working life.
It is not this individual's fault that most of the old houses in the street are long gone, that all those blocks were subdivided and that a quarter acre in Carlton North these days is worth $1 Million. They've never been rich. They don't have any liquid wealth.
On the flip side, I agree that wealthy people pay a far smaller proportion of their income in tax than us mere mortals pay. Getting them to pay a similar proportion of tax is desirable. I'd love a solution to this problem. But, I don't want that solution to hurt thousands of people in the spirit of being 'fair'.
The people at prosper have put some thought into this. https://www.prosper.org.au/campaigns/stamp-duty-to-land-tax/ there scheme allows the elderly to defer the tax until sale which prevents them from being forced to sale but still incentivises it.
I didn't realise that the idea was to replace Stamp Duty with land tax. The biggest hurdle I see with that idea is that Queensland, New South Wales, South Australia and Western Australia^*^ have all privatised their land registries. Stamp Duty now goes to private companies and not the state governments. They can't simply replace stamp duty with a land tax.
^*^WA han't totally privatised their Land registrar, but the process of collecting Stamp Duty is private and the proceeds of a land transfer don't go to the government.
As bad as privatising land registries as it's not like the 6% stamp duty you pay is going to the land registry. There's probably a nominal fee that these land registries are getting on each lookup and transfer.
Fuck a flat land tax idea. On top of GST, Income Tax, Rates and interest (plus stamp duty), it's just a money grab.
I mean like do you have an alternative to taxes? The whole point of this is you'd pay less after the switch.
Honestly, I've been on this rock long enough to know a new tax goes on the the rest don't come off.
In the 80s I think there were a few proponents saying that a land tax could replace all other taxes. Very broad based and efficient.
IDK if it was a good idea, it probably would've been good in the 80s IMO.
However, completely retarded in the digital age. Productivity does not require land anymore.
Yeah that single tax movement has been around since the 1880s. Replacing all other taxes is maybe a bit extreme but pretty much all economists suggest increasing land taxes including our own Henry Tax review.
However, completely retarded in the digital age. Productivity does not require land anymore.
If this was the case land wouldn't make up the majority of "wealth" and we wouldn't be having a housing crisis.
True, increasing land tax is a great idea.
Property is valuable but generally we don't tax wealth, only production.
This issue is actually what undid Margaret Thatcher
Yep. Can't dodge it, encourages productive use. The only thing is it might push more properties towards airbnb unless you tax that more to make it less profitable.
Minimum density to housing.
1km from minor train station, light rail or BRT should have a building height of 50m+ to 100m
Major stations with express services minimum 100m to 150m
Metro 150m+
Problem 2 is immigration just comes to NSW and Victoria. Have different citizenship requirements depending on where someone is living.
For example something like 10 years minimum for citizenship if you've worked or lived in Sydney or Melbourne but 5 years if you haven't.
For example Spain has different citizenship requirements depending on where you're born. If you're born in Portugal, Andorra or any of their ex colonies it's only 2 years residence to get citizenship for everyone else it's 10 years.
We could apply the same principle - citizenship takes 5 times longer if you reside or have resided in Sydney or Melbourne. This will reduce the immigration demand on these two cities.
More density is great, but you're taking it to some rather ridiculous extremes. 1 km is a really large radius.
Looking at Wooloowin Station in Brisbane, 1 km takes you to the opposite side of Lutwyche Rd in the west and Sandgate Rd in the east, which are areas that are very obviously not connected in terms of locality to Wooloowin Station.
The guideline for good accessibility is usually a 400 m walk to public transportation, and I think that means it's also a good guideline for where the increased density should be located around stations. (It's a bit borderline on account of the walking distance being the indirect route taken on the ground, while the radius is a simple "as the crow flies" distance, but it's a decent guideline anyway.)
50 m tall is, according to this report from the city of Victoria in Canada, 17 storeys. That would make 100 34 storeys and 150 m+ a minimum of 51 storeys. That's huge.
But we can achieve much greater density on the whole without going to such extremes. So-called "gentle density".
Council’s current approach has been “avoid changing anything at all, but when we do change, push for the tallest towers we possibly can get away with”. My policy would be almost the opposite of that. I would make widespread sweeping changes across the entire city, but the scale of those changes would be fairly small. I'm using Brisbane City Council terminology because that's what I'm familiar with, but similar concepts should apply:
I would eliminate all LDR and CR1 zones entirely and replace them with LMR3 and CR2, respectively. LDR allows only single-family separated homes. LMR2 allows 2–3 storey apartments and townhouses, as well as granny flats and duplexes, while not outlawing single-family separated homes. Then, I would make everywhere within a 400 m radius of a train station HDR1 (with the caveat that my version of HDR1 would still permit townhouses and duplexes like the current LDMR and MDR do, but which current HDR does not, while still not permitting single-family separated homes). Between 400 and 1000 m of a train station would be MDR. MDR is 5 storeys, HDR1 is 8 storeys. HDR2 (15 storeys) could be used for major important train stations, but really I don't know if I want to see anything more than 8 storeys further out from the CBD than about 5 km.
But that first step is really the most important. You could get a doubling or more of available density just by removing all the low density and replacing it with a gentle sort of medium density, with the higher density areas sort of like the spice on top.
Too little too late.
I swear I've seen this exact post before. Might be because the answer is a pretty clear yes; if combined with killing AirBnBs. If only this changes, then the problem won't actually be solved.
We just should stop shovelling people into cities. Lots of people can work remotely and one who can't will follow one who can. Just tax companies for having office unless they do production. Yeh, yes it will crash prices in CBD, so not going to happen.
Cities are still good even if you don't need to commute into work. Having higher density means people can walk or cycle to visit friends, or when going to social and sporting clubs. They mean you can get to the shops much more easily, and are more likely to have access to a wide variety of niche stores.
They're better for the environment because they reduce dependency on cars, and reducing the need to drive everywhere is excellent for children and teens who can gain a greater degree of independence when they don't have to be driven everywhere by a parent. And good for health because more passive exercise is amazing as a substitute for driving everywhere, as well as because of the reduction in pollutants in the local air caused by driving.
In short, suggesting people should spread out ad infinitum might be fine when you just look at it in terms of "home" and "work" travel, but in a much broader sense there are huge advantages to keeping people located together.
We tried that in Canada, housing in small towns just shot up to super expensive as well, and it's now just expensive everywhere.
It's already everywhere. Places like Wollongong and Newcastle have the same housing issues as Sydney. Sometimes even worse. And even further out to places like in the Maitland and Cessnock council areas people can't afford rent anymore. And every new vacancy has hundreds of people showing up.
In fact local people are suffering more as cashed up Sydneysiders are swooping in paying the "cheap" rents which are already double what they were pre covid.