Capital Gains Should be Cut
It’s time to end negative gearing, the first-home buyers grant and stamp duty, according to George Megalogenis. He says the concepts should be ended for the sake of housing affordability and obtaining a mortgage. But capital gains tax should be gone too, some say. The capital gains tax reduces housing turnover by making it more tax effective for investors to realise capital gains through refinancing instead of selling, so they buy and hold indefinitely. The result is fewer houses for sale, at higher prices.
Some say it is hypocritical for the Federal Government to pressure the states to abolish stamp duty while keeping its own tax on mobility. Some say it is better to abolish all state and federal transaction-based taxes, so that more young families can buy former rental homes from investors. Some say this would also improve housing affordability and cause some of the current concerns to be addressed.