My first instinct is “yes” but then I thought about it and I think it’s just going to exacerbate the short-stay problem unless combined with other measures.
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.
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They’re worse than a tax break, they’re an investment.
So to everyone who has those “investments” (like Boomers who did well, people born into rich families, most policitians and most of politicians friends), house prices spiralling out of control is desirable.
They’ll never let the bubble burst.
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.
… 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.
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’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’.
So what is your argument here, that people who got asset rich through no effort of their own should have that wealth protected so their kids can inherit as much as possible? Is it ok to tax someone if they worked hard to earn the money to buy a $1 million dollar home today, but if you got lucky in the past you should be tax exempt? Tying up your assets in your home already has some major tax benefits - it is exempt from capital gains tax, and barely counts towards the age pension.
Yes there need to be corresponding changes to allow for things like putting off the tax until the home is sold, but I don’t think we should rule out changes to the tax system because your hypothetical home owner didn’t intend to earn 970,000 profit when they bought their home. Perhaps we could also make a change so that this hypothetical pensioner could sell their quarter acre block and move into somewhere smaller that they can more easily maintain, freeing up some of that money so they can actually spend it, without losing most/all of their pension because the same wealth is now “liquid wealth”.
My argument is merely that a flat land tax is not as fair as it sounds on the face of it. There are issues with it - and if the intent is to replace stamp duty with a land tax, that’s a total non-starter for most of the country: since stamp duty has been privatised.
I’m certainly not qualified to produce a solution to the problem.
I’m not qualified to produce a solution either, but I think changes to taxation in some form are inevitable. One of the big issues with taxation is who gets the money. Income tax and GST is collected by the Federal governement, who portion out some of it to the States. If the States need/want more money they need to rely on things like stamp duty, land tax, and fees, charges & fines. So even when it would be logical to make coordinated changes to income and weath taxes it is not really politically feasible.
My understanding is that, like with income tax, a tiered rate instead of a flat rate would be fairest. So if you put a low (or no) tax on properties under the average price you would only be taxing those with a large amount of accumulated wealth. Combine that with a deferred payment option (think HECS for houses, with the loan secured by the house) and I think you would have a fair system.
When you combine tiered taxes with a flat rate benefits system you get the fairest outcome - and you cut a lot of red tape. Which is a major benefit of a universal basic income. Strip out the means testing all together - give everyone basic income support, a pension once they reach a set age, pay for education, childcare etc. If you are a multi billionaire you are still going to be paying way more in tax than you receive in the pension, if your education leads you to have a higher income you will be paying it back through your increased tax, we don’t need HECS. And if you remove all of that time and money that goes into Centrelink compliance bullshit we could probably give everyone a four day working week without noticing the slightest difference in productivity.
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
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.
Stamp Duty now goes to private companies and not the state governments
WTF? When you buy a home, the $40,000 Stamp Duty does not go to the company running the land registry. It absolutely goes to the government.
Maybe the company gets fifty bucks or something. They’re not getting $40k.
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.
Outside of holiday towns I don’t think AirBNB is actually an issue it’s such a small percentage of properties that it’s really just marginal. Arguably they get a small subsidy for paying residential rates but most the time it’s an apartment that gets the minimum rate so effectively a hotel is paying less.
In holiday towns it’s similar but arguably they cause more dramatic spikes in rent but overall it should be similar. Tourists are also generating a lot of revenue and jobs so would you rather low rent but no jobs or higher rent but a competitive job market?
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.
Its definitely not an extreme it’s definately already happening just at a slow pace for the housing we need. Maybe not in Brisbane but there’s precedence.
Parramatta is about 23km from Sydney and will have 8 150m+ , with the tallest at maximum height 230m. Apparently that 230m was forcibly scaled down due to airport height restrictions.
Liverpool, a smaller suburb has a few lined up that is over 100m, including 2 over 1km away at the edge of the suburb. Rhodes, Macquarie Park, Chatswood, St Leonards are new suburbs that now have skyscrapers including residential skyscrapers where it didn’t have even 5 years ago.
If you look here there’s significant development quite a distance from the city especially if you look at the upcoming pipeline of buildings
https://en.m.wikipedia.org/wiki/List_of_tallest_buildings_in_Sydney
And the latest news although not residential, still a step in the right direction - this is nowhere near the CBD by the way.
https://www.sydneymetro.info/article/contract-awarded-develop-norwest-metro-station-site
We definitely need more density. Sydney’s new metro network is running at less than half capacity because it runs through detached housing. With a capability of 30 trains per hour it’s a waste without the density I mentioned. It is currently operating at only 15 tph during peak.
In terms of planning the government here has recently switched from determining density based on how far you are from the city which is common elsewhere in Australia to density tied to amenities. Many near the station are now zoned R3/R4 which is medium to high density despite being an hour from Sydney. This is a good solution it doesn’t preclude anyone from owning detached housing, but don’t expect good public transport on tour doorstep.
But yes I do realise this is unique to Sydney, we’ve had local clusters so each council has its own commercial hub. We have a non radial transport network so travelling locally is alot easier. And we run express trains from first to last including public holidays and weekends. So some groundwork is already done to support a denser population.
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.
While I don’t disagree that cities give better access and is better for the environment, I do disagree about the independence for young people. In the city, it is not seen as safe for a young person, like under 10, to walk to their friends house in the same suburb. In the country that would be perfectly normal. I do agree, car transport becomes a necessity for events and meet ups that are further afield. However, that’s also the case in the city. Just no for every event due to better public transport, but our public transport systems are not all covering.
You seem to be conflating both the inner city and the current car-dependent sprawling suburbia, and in so doing you’re contrasting car-dependent suburbia with rural living. But my entire point is to contrast the difference between low density living (whether it’s rural or suburban sprawl) with the higher density that city living offers.
The thing is, when you increase density it becomes a lot easier to put in place better public transport routes. Our current poor transport networks are partly the result of how inefficient it is to deliver public transport to low density environments. When things are closer together, it also puts more things within range to cycle places, which is absolutely perfect for kids and teens. Statistically, kids in the famously dense and cyclable Netherlands are the happiest in the world.
When you’ve got reasonable density and eyes on the ground, and lack that soulless feeling of large stroads they have to walk or ride along, people feel safer letting their kids walk or ride to go play with friends or get to school or to sports clubs.
Oh, no, I’m not. I’ve lived in all 3 you’ve mentioned. I think what is confusing you is that everything is on a spectrum. With high density, there can be safety issues and transport issues due to the density. With low density there can be safety issues and transport issues due to the isolation. There are different problems with each. Denser living will improve, not fix things.
Honesty I do not believe that many would prefer to live in units where others walking on you head than in a house. Yes you can be forced to live in such condition because unit it is all you can afford while having reasonable commute. Remove that requirements and people will spread. Historically cities were build for mutual protection after that to concentrate work force. It is no longer relevant, they have nothing to offer in modern world. Yes it is cheaper to confine population in cities, but tent camps are even cheaper. to run Cities are not something we should use in the future.
I do not believe that many would prefer to live in units where others walking on you head than in a house
Well, then why are children in the Netherlands the happiest in the world?
I find the way you’re framing it very interesting, too. “Where others walking on your head”. I think it demonstrates a pretty poor understanding of what it’s actually like to live in well-built apartments. And it’s certainly ignoring the townhouses and duplexes that make for some of the best gentle density.
Yes it is cheaper to confine population in cities…Cities are not something we should use in the future.
Yes, it is. If you want people to be moving out into more sprawling suburbs, or worse, rural living, why not ask them to directly pay for their own infrastructure costs like building and maintaining the roads, sewerage, and electricity, instead of expecting the taxpayers living in more sustainable housing to foot the bill. Not to mention increasing how much we charge for the impact all your increased driving has on the environment, so that it properly prices in the externalities.
Right now we heavily subsidise rural living. And it makes sense, because by and large people who live rural are providing important services like farming, or are in industries supporting those people like local stores and schools. But continuing that huge subsidy in a context where people are moving rural for the hell of it? Lol nah.
We tried that in Canada, housing in small towns just shot up to super expensive as well, and it’s now just expensive everywhere.
In this case only answer is more houses. And lowering building code, so building for new house does not mean you have to pay mortgage for next 25 years.
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.
It should be based on bedrooms.
A four bedroom house should have a minimum three people living there as their principle place of residence. The address on their drivers license, electoral roll, school encirclement, etc. If you have less people, you should pay… I dunno, $40k per year in tax?
The government can use that $40k per house in tax revenue to buy all the homes people are suddenly going to want to sell, and put them on the rental market. In some parts of Europe half of all rentals are owned by the government. It’s a system that works well. It also makes town planning easier - often homes need to be demolished in order to build infrastructure for example. The government can do that if it owns a suitable residence with a lease that’s ending soon.
Nah, i don’t like this idea at all.
IMO it violates the age old principle of “quiet enjoyment”. Whether you own or rent, you should be able to determine what happens in your own home, provided that it doesn’t impose on anyone else’s quiet enjoyment of their premises, nor the personal liberties of your co-occupants.
Imagine whatever agency knocking on your door to confirm that the registered occupants do actually reside there. No thanks.
Doesn’t this encourage knocking down walls, making bigger bedrooms, reclassifying rooms as non-bedroom, and knockdown rebuilds.
Bold! I like it. I worry it would fall into arguments of what is a bedroom and what is a study/wfh space, etc. Also, what if someone can’t find someone to fill their extra bedroom? A 40k tax would force people to live with people they don’t feel safe around.
