Housing Affordability the focus of Pre-Budget Submission by REIA


The Real Estate Institute of Australia has put forward a Pre-Budget Submission to the Commonwealth Government identifying a range of areas which affect housing affordability that need to be addressed in the 2011/12 Budget.

REIA’s submission calls on the Government to:
• Retain current arrangements for negative gearing of property investments;
• Ensure that the family home will not be subjected to Capital Gains Tax (CGT);
• Commit to no increase in Capital Gains Tax on property investment;
• Remove stamp duty on property transactions;
• Review the First Home Owners Grant (FHOG);
• Allow first home buyers access to their superannuation for the purchase of a home, and;
• Monitor the Housing Affordability Fund (HAF) and National Rental Affordability Scheme (NRAS) to observe their effects on housing supply and conduct a review which considers additional measures to bridge the demand - supply imbalance

The REIA urges the Government to review the amount currently provided to first home buyers as the relative size of the grant has declined markedly in relation to house prices. When the FHOG was introduced in July 2000, the Australian quarterly weighted average median house price was $220,443. The Australian weighted average median house price in the most recent quarter for which data is available, December 2010, was $545,873.

In addition to increasing the FHOG, REIA proposes that the Commonwealth Government should establish a scheme which would encourage young Australians to contribute to voluntary superannuation by allowing access to these resources for the purposes of raising a deposit for a first home.

REIA has called for the retention of negative gearing of property investments as it is complementary to the goals of the Housing Affordability Fund (HAF) in addressing the supply of rental accommodation.

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