Getting super funds to invest in housing
Corporations and superannuation funds will be encouraged to enter the property market under key recommendations of the Henry Review into Australia’s tax system, a seminar will be told this week.
The recommendations to change the way in which land tax is levied and the introduction of a 40 per cent savings income discount could help ease Australia’s critical housing supply shortage by boosting the construction of rental homes, according to Australian Housing and Urban Research Institute (AHURI) researcher Professor Gavin Wood.
Prof. Wood has analysed the impact of the Henry Review’s recommendations on housing supply and affordability.
The Henry Review has floated a proposal to introduce a 40 per cent savings income discount that would reduce the attractiveness of negative gearing. It also recommends abolishing stamp duty and levying a broad-based land tax on property, including owner occupied homes.
'Among the important reform proposals in the Henry Review is one that would introduce a broad-based land tax' said Prof. Wood, of the AHURI RMIT Research Centre.
Instead of determining the tax liabilities of land owners on the aggregate value of the land owned, Henry recommends a change to taxing each parcel of land individually.
'The effect of this would be to significantly reduce the land tax burden on large investors in property and the flow on effect could be more institutional and fund investment in the sector.'
'The current land tax regime has been a barrier to investment in property by corporations and superannuation funds.'
'The Henry recommendations produce a more level playing field between corporations and super funds and individual landlords.'
Prof. Wood will deliver his preliminary findings at a seminar in Melbourne on Thursday (March 17).
Additional information
Media contact: Laurie Nowell - 0467 073 132.
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