The Treasurer of Australia, Scott Morrison, is set to meet with his state and territory counterparts to discuss the housing affordability issue beleaguering the nation.

What seems unlikely is Morrison bending to NSW Premier Mike Baird's suggestion this week of a review of tax concessions, such as negative gearing, as part of the housing affordability discussions. The review of tax concessions was originally proposed by the NSW Minister for Planning, Rob Stokes.

Morrison fought tooth and nail against the changes to negative gearing proposed by the Labor Party during this year’s federal election. This week, he said the housing affordability issue was about more than just people saving to buy homes in Sydney and Melbourne, as the welfare of Aussies who rent had to be considered as well.  

Morrison said he wasn’t about to do something which could potentially jack up the rents of the 30% of Aussies who rent – which happened as a result of the negative gearing changes during the last round of reforms.   

Taxes charged on housing is crippling affordability

Meanwhile, Graham Wolfe, HIA’s chief executive of industry policy and media, stressed that housing affordability isn’t going to be addressed by political point scoring around negative gearing or capital gains tax. “It’s a distracting and lazy debate, and one where all three levels of government point a finger at each other, when it’s a fact that around 40 per cent of the cost of a new home is taxation,” he said.  

“Increasing the supply of new housing is an obvious key to improving housing affordability. But retaining the enormous taxation burden on the cost of new homes is an anathema to addressing the problem.

“It’s the taxes and levies that are charged on every new home that overwhelmingly defeat all attempts to reduce housing costs. State-based stamp duty on the purchase of a typical new home alone adds a $91 per month burden on household mortgage repayments.”
 

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