Login
iscover
The top property executive has a proposal for freeing up supply for first home buyers: stamp duty tax breaks for older Aussies.
Angus Raine, executive chairman of real estate superbrand Raine & Horne, has urged the federal government to consider tax reform for Australian home owners aged 70 and over.
With borrowing costs on the rise and housing affordability at its lowest point since the mid-1990s, many Australians have been weighing in on potential policy changes in the lead up to the May 2024 federal budget.
From Greens leader Adam Bandt’s appeal for reform to negative gearing and capital gains tax (CGT) discounts, to Treasurer Jim Chalmers’ recent shutdown of the proposal, tax reform plays a significant part in Australia’s ongoing conversations about housing affordability.
Mr Raine believes that with the proportion of property investors aged 60 and over rising – showing that many people are holding onto their investments for longer – tax incentives encouraging older investors to sell could play a role in ameliorating market conditions for first home buyers.
“Property held by older investors contributes to supply challenges in capital cities,” Mr Raine said.
According to the executive chairman, housing supply could be freed up by implementing a two-year, means-tested-free sunset clause for the payment of CGT obligations on the sale of homes belonging to Baby Boomer and Silent generations.
“One option to breaking the supply impasse is to provide older property investors with an exemption for, say, 24 months on the payment on the CGT liability,” Mr Raine explained.
“The aim of this exemption is to free up supply by encouraging the release of long-held assets.”
As well as introducing CGT exemptions, Mr Raine pointed to the potential of stamp duty tax breaks.
With both stamp duty and home values rising steeply since the COVID-19 pandemic, the executive expressed concern that “stamp duty eats into the retirement nest eggs of many older Australians that are tied up primarily in their three- to four-bedroom homes”.
He called for stamp duty tax breaks for empty nesters aged over 70 who wish to sell their primary place of residence and downsize into a smaller home.
“This proposal would unlock supply and allow the next generation of families to occupy these larger houses,” Mr Raine said.
He shared that his suggestions were inspired by earlier superannuation changes made by the Howard administration in 2007.
According to Mr Raine, short-lived policy changes that allowed retirees to make up to $1 million in after-tax superannuation contribution caused property listings in Sydney to “skyrocket”.
“Seventeen years later, my conviction remains the same that implementing tax breaks for older property owners could yield similar results by unlocking a significant amount of tightly held property in our capital cities for many years for the benefit of younger buyers and upgraders,” the executive said.
Newsletter
