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Readers’ letters on Australia’s housing crisis, tax reform, mining, Liberal Party climate policy and the CFMEU royal commission.
I had some thoughts about your article “Stamp duty rates are wrong, analysts say. Downsizers agree”, which highlights one of the biggest inefficiencies in Australia’s housing market.
Older Australians are reluctant to shift into smaller places because of hefty government levies. A temporary pause could rapidly improve supply. David Rowe
Our sales network regularly speaks to empty-nesters who would happily move to smaller homes but can’t justify paying substantial stamp duty.
This is far from a new issue. The Financial Review highlighted it almost a decade ago in “Angus Raine calls for stamp duty break to encourage empty-nesters to downsize”. Then, I argued that stamp duty relief for downsizers aged over 70 would encourage housing turnover and improve affordability. Nearly a decade later, the case is even stronger.
Sydney eastern suburbs retiree Michael Grant and his wife live in a five-bedroom house worth about $3 million. They would downsize their living but for one big problem: a $150,000 stamp duty bill.
“Assuming that we stay in a similar area, even if we move to a two or three-bedroom apartment, it’s going to cost a similar amount to what we will get for our house,” said the recently retired software worker.
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Everyone hates luxury development. But we need fancy new apartment buildings to fix the housing crisis: When rich people can move into new units, then non-rich people can move into the older homes that the rich move out of.1
Despite the truth of this, voters just do not believe that more building alone will make housing more affordable. And many politicians want the least fortunate Americans to see more obvious benefits from homebuilding.
One solution is to force developers of fancy new apartment buildings to set aside some of those homes for low- or moderate-income people. This policy is called inclusionary zoning.
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