Direct action was taken to improve housing affordability in Tuesday’s budget and this included further measures to level the playing field for local buyers competing with foreign buyers. This included a $5,000 annual tax (minimum) for foreign buyers who leave their property empty. Given that they are not permitted to rent it out if it’s been bought as a “new” building (meaning they have declared they will build a new home on it), this places them in something of a bind. But how to determine if it sits empty? Rely on “dobbing” from neighbours or how much water is used? Not easily enforced as you don’t need an app to leave a tap on…
Cancelling tax breaks for investors to visit their investment properties interstate won’t set the world on fire (although it’s a thoroughly sensible tightening of lurks available to investors), nor will cancelling the deductibility for reports from quantity surveyors to advise on perfectly legitimate depreciation allowances.
One measure that might just free up some homes and encourage a bit of downsizing is the right to make a contribution to superannuation of up to $300,000 for pensioners over 65 if they sell their principal place of residence. Many older folk are currently a bit trapped being asset rich and cash poor and this is an excellent way to provide the incentive to move to smaller accommodation and increase supply of these homes that saturate the suburbs of every Australian city.
Unfortunately the savings incentives for First Home Buyers, whilst laudable, will only assist over coming years and won’t help those hoping to buy right now. Overall though, a commendable budget for tackling a challenging problem.
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