A new government, a new approach on housing.
A little while back Labor tried to take negative gearing, and capital gains tax changes to the election, and it didn’t quite work out. Housing has a lot of vested interest groups.
Here’s another effort, fairly mild at the margin, with the NSW Liberal government proposing moving to a land tax instead of stamp duties.
What will that do to the housing market overall?
Well, probably not a huge amount. The drivers of the market are overwhelmingly going to be about where mortgage rates wind up, and how the Australian economy (e.g. unemployment rates) fare overall, rather than the implications of the tax.
In our view, it is a very mild downward pressure, on its own, to prices (as it frees up transactions that might not have otherwise happened, e.g. the proverbial empty nester or work relocator) and likely benefits younger, lower income and asset households (given how it is structured) than older wealthier households.
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