Australian Property News
Housing affordability key issue
Posted on Thursday, December 11 2008 at 5:08 PM
The Henry Review has released a discussion paper emphasising the importance of housing affordability, a move welcomed by the Real Estate Institute of Australia (REIA).
In its submission to the tax review, the REIA stated its belief that property taxes, stamp duty and land taxes were inequitable, inefficient and unstable as a revenue source.
Not only do the state and local government imposed taxes and charges have a large impact on housing, it says, but they also have a detrimental impact socially and economically.
They discourage people from moving, thereby impacting on labour mobility and in addition, according to the REIA, the taxes and charges restrict the efficient operation of the Australian economy, with one half of all the states revenue coming from property taxes.
When the economy is in a downturn, the states are forced to reduce their expenditure accordingly, when what is really needed is increased spending.
The REIA says stamp duties should be replaced with more efficient taxes, which would increase household consumption by around the same amount as the measures announced by the Commonwealth Government to strengthen the economy in the current global crisis.
“I realise the process of taxation reform has a long way to go but the early signs are encouraging that the inefficient and inequitable taxes associated with real estate may be abolished,” says REIA president Noel Dyett.
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