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Report Housing markets Housing assistance and policy Home ownership

Pathways to housing tax reform

Final Report No. 301

Date Published: 05 Jul 2018

Authors: Richard Eccleston Julia Verdouw Kathleen Flanagan Neil Warren Alan Duncan Stephen Whelan Kadir Atalay

The AHURI Inquiry into ‘Pathways to housing tax reform’ developed a set of reforms to the taxation of housing and property to contribute to a fairer and more sustainable
housing system in Australia.

There is a growing consensus that Australia’s tax system has contributed to poor housing outcomes and economic inefficiency more generally, with suggestions that reforms such as abolishing transfer duty and reforming state land taxes, reducing the capital gains tax (CGT) discount and limiting negative gearing, and changes to the pension assets test would help improve housing affordability.

Despite such consensus, formidable barriers persist and to-date housing tax reforms have been piecemeal and ineffective. Housing tax policy in Australia is subject to political barriers and entrenched interests that hinder policy change, and there is widespread pessimism about the prospects for effective structural reform.

The reform program rests on the following principles:

  • Political and economic imperatives demand a coordinated, long-term approach to housing tax reform informed by shared objectives and a coherent framework for policy change.
  • A national reform agenda requires national leadership and, where possible, cooperation from state and local governments.
  • A reform strategy should initially focus on setting and agreeing to national policy goals and establishing the administrative foundations for reform. It should then move to gradually adjust policy settings to achieve long-term housing policy goals.

DOI: 10.18408/ahuri-4111001

Published by: Australian Housing and Urban Research Institute Limited

ISSN: 1834-7223

ISBN: 978-1-925334-65-4

 

Citation: Eccleston, R., Verdouw, J., Flanagan, K., Warren, N., Duncan, A., Ong, R., Whelan, S., and Atalay, K. (2018) Pathways to housing tax reform, AHURI Final Report No. 301, Australian Housing and Urban Research Institute Limited, Melbourne, https://www.ahuri.edu.au/research/final-reports/301, doi:10.18408/ahuri-4111001.

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