The Science Party’s aims with regard to housing in NSW are to slow the excessive increase in house prices in inner-city areas and to ensure all residents have access to stable, affordable accommodation.
Adequate supply of housing is one factor in stabilising house prices, but not the whole picture.
The capital gains tax (CGT) taxes profit on the sale of property (excluding the family home) and other assets. Since 1999, property investors have been able to take advantage of a 50% CGT discount when they sell a house: the profit that they make from the sale is taxed at half the rate as income from work.
Negative gearing allows property investors to reduce their tax bill if income from rent does not cover the combined cost of improvements to the property and loan interest. It is often regarded as the culprit in the inflation of the house market. However, when negative gearing for investment properties was introduced in Australia in 1985, it had no discernible effect on house prices on its own. After the introduction of the CGT discount in 1999, investors started to take much greater advantage of negative gearing and house prices in capital cities started to increase disproportionately.
Is it therefore part of the Science Party’s federal platform to remove the Capital Gains Tax discount. If negative is to be addressed, it should be in the context of closing avenues of tax minimisation rather than as a way to tackle rising house prices.
1. Review restrictions and regulations to promote open space, density, variety and sustainability
Policy: Review recommendations and set minimum standards for open green spaces.
Discussion: Adequate and accessible green space is correlated with higher levels of perceived general health. New South Wales should set minimum standards for distance to, and amount of, green space. For example, the UK Accessible Natural Green Space Standards (ANGSt) report (downloadable as a PDF here via Natural England) recommended that no person should live more than 300 m from a green space of at least 2 hectares in size.
Policy: Loosen height and density restrictions on urban infill areas with high demand.
Discussion: Former industrial estates (“brownfield” developments) are ideal locations for accommodating additional population without adversely affecting existing residents. Density should also be encouraged in new developments on previously undeveloped land (“greenfield” developments). To encourage density, governments must ensure appropriate that public transport infrastructure is in place.
Policy: Encourage mixed-use development, for example the current “B4 Mixed Use” zone guidelines.
Discussion: Regulations that are not related to safety or livability can have a detrimental effect by prohibiting land from being used for its most efficient purpose. Allowing a mix of offices, retail and housing of various densities to exist close to each other, or in the same building, will give people the best chance of finding housing that best suits their needs
2. Land tax
Policy: Implement a broad-based land tax to replace stamp duty, existing land taxes, and payroll taxes. Local councils will receive a flat proportion of the land tax collected, but may choose to charge additional rates.
Discussion: Stamp duty is a disincentive to house sales as it is charged to the buyer at the time of sale. The proposed tax would instead be levied quarterly for investment properties, and owner-occupiers would have the option of either quarterly or time-of-sale payment.
Further discussion of our Land Tax policy can be found here.
3. Reform public housing policy
Policy: Work with relevant bodies to provide housing for people who are long-term homeless.
Discussion: Apart from the fact that we consider it a right for everyone to have a roof over their heads, simply providing stable housing to the chronically homeless is substantially cheaper than dealing with the crises that arise from chronic homelessness, according to recent studies from Charlotte and Santa Clara County in the US, Canada, and replicated in Brisbane.
Public housing policy should also be reviewed to make the transition away from public housing to the private rental market easier for those who are capable of doing so.