A new Grattan Institute report showing that higher-income earners are the main winners out of housing and tax policy should lead to changes in the system the ACTU said today.
ACTU assistant secretary Tim Lyons said that both renting and buying a first home were becoming more difficult for workers.
“We need to look at housing policy to make sure we are not making renting and buying houses more less affordable. The current system delivers too many benefits to investors,” Mr Lyons said.
Mr Lyons said the ACTU supported changing negative gearing laws to only allow investors to deduct losses from an investment property against any profits they’ve made from other investment properties, rather than against their total income.
“Negative gearing, combined with changes to capital gains tax laws in 1999, have led to an increase in the number of property investors which is making it more difficult for first-home buyers.”
“We are already seeing a drop in home ownership rates amongst low-income households and people aged under-45.”
“We are particularly concerned that rising prices and the growing incidence of insecure work are making it harder for low-paid workers both to take out mortgage and find affordable places to rent.”
“Workers who cannot predict their hours from one week to the next find it more difficult to borrow for a home loan or to pay their rent.”
“There is little support available for private renters through the tax and welfare system, even though they make up a quarter of all households.”
The Grattan Institute’s report, Renovating Housing Policy, found homeowners received $36 billion a year in government subsidies, landlords about $7 billion and renters less than $3 billion.
The ACTU also supports a move away from stamp duties towards a broad-based, progressive land tax, as recommended by the Henry Review.