2 weeks Ago By Rachel Clun
A tax write-off for property? Where have I heard that before? Launching the Coalition’s signature housing policy over the weekend, prime ministerial hopeful Peter Dutton said something along those lines while unveiling his plan to give first home buyers tax breaks on mortgage interest, to the tune of $12,000 a year for five years. Peter Dutton formally announced the Coalition’s housing policy on Sunday. Credit: James Brickwood The policy has distinct echoes of another such scheme brought in more than 25 years ago – one that helped turn Australia’s property market into an investors’ paradise and create the crisis we find ourselves in today.
I am talking, of course, about negative gearing. Though this financial manoeuvre was first introduced to Australian taxpayers about 90 years ago, most Australians associate negative gearing with John Howard and then treasurer Peter Costello, who made the policy much more attractive and popular by halving the capital gains tax on all investment properties if owned for a minimum of 12 months. While those changes were not the sole reason house prices subsequently skyrocketed, they certainly didn’t do much to help , and first-time buyers began to find they were consistently losing out to negatively geared investors on auction day.
Loading Though the housing situation was bad before the pandemic, it became dramatically worse once COVID-19 hit and household sizes shrank, building and construction prices soared and post-lockdown migration to Australia jumped to unexpected highs. Where once a home cost three or four times the median income, it now costs 9.1 times that in Sydney, while the national median is 8.
6 . And let’s not even get started on how bad renting continues to be across all major cities and the regions. Unsurprisingly, then, housing was a core issue for the entirety of the last parliamentary term (and an issue that helped propel Greens housing spokesman Max Chandler-Mather into parliament).
.
