Dutton saying he'll give tax deduction for mortgage interest payments. What a dumb as fuck idea.
1. It'll drive a hole into the federal budget. I know federal government debt doesn't really matter, but a nicely balanced budget would be better than one with a structural deficit built in. Because, eventually, federal debt does matter.
2. It won't help hose prices do anything except go up. Giving people more money to spend on mortgages, just means they'll go for bigger mortgages.
Xi Jinping is right. Houses are for living in, not investment.
We need both major political parties and probably the greens to all agree to a plan and agree to stick to it, rather than try and screw the other party over. My thoughts are ...
To make houses more affordable will take time. LOTS of time. A decade or so. At least.
We can't just drive the price off a cliff, or you'll end up like the Chinese real estate market. Utterly & totally fucked. No one wants that.
We want to encourage private individual home ownership.
ONE home.
1. Capital gains tax on the house you live in should probably drop, but that would never fly, so ... do nothing. You won't get far any way. Lets try and go for things that are achievable. Besides, we want to encourage private individual home ownership.
2. CGT on first investment properties, drop it from 50% to zero in 10 easy 5% drops / year. Everyone can make a decision anywhere along the line that now is the right time to get out of the market. But for the rest of your investment properties, it's a 10% drop / year. This includes corporate ownership.
3. Negative gearing. Same basic idea. But drop it by 10% / year. Again, you can jump out of the market and sell up when you feel it's right. And again, it falls faster for multiple properties (20% / year)
Owners get to decide which is their "first" investment property. But they don't get to change it later. If you pick in a sub optimal manner, to bad.
Holiday homes don't get any tax benefit at all.
Yeah, this will cause a 'lost decade' of real estate price growth. And that is a good thing. It is the point of the exercise. It means that prices will stay about the same, maybe drop a little. But with pay rises, more people will be able to afford more houses to live in.
It also has the happy side effect of helping balance the federal budget.
If you want to invest, the stock market is just over there.