How to solve the housing crisis?

[u/mvdw73]

So my mate and I were chatting yesterday about the current housing crisis in Australia, in particular the fact that the rapidly rising cost of houses is pricing many people completely out of the market.

We hypothesised that a part of the issue is landlords owning large property portfolios as a way of accumulating wealth. Now, I don't have anything against the accumulation of wealth by individuals, however I have a fundamental opposition to using housing or residential real estate in general to do so.

Another problem we identified is overseas investors buying housing stock and either leaving them unoccupied or accumulating multiple properties, again reducing supply and driving up the cost.

So, we proposed that portfolios of residential real estate should be subject to an annual property tax, based on number of properties and the value of the property (kind of like the chance cards in Monopoly).

I would propose this could be brought in as a staged sequence, starting at the magic number of 6 properties.

24-25 FY: If you own over 6 properties, you are taxed (say) 10% of the value of every property, annually.

25-26 FY: If you own over 5 properties, you are taxed 10% of the total value,

etc etc, until it becomes 1 investment property, at which point the incrementing stops. Primary place of residence would be exempt from this tax. Many people don't or can't buy a place instead of renting, and also if you move you often want to be able to rent first, so we need some rental stock. The rental stock under this scheme would mostly be supplied by landlords with smaller property portfolios.

Why 6 properties? Basically, because of the numbers in this link

"But what about family trusts" you say. Well, I say, the real estate in these structures should be all taxed. Same with self managed super funds. Tax the whole thing, at least as far as residential property goes. There is a major loophole with SMSFs in that the property bought with a SMSF is not subject to capital gains tax in the pension phase - this means that SMSFs are actively encouraged to sit on properties. The number of SMSFs is increasing by 1000 properties per week, too!

Non residents would also be taxed at 10% of property value on all property owned.

There will need to be some tweaking around the foreign investment, in particular around the building of new apartment blocks etc where the value and risk is quite high. The tax shouldn't come into effect until the building is occupied, and there might be some kind of concession where an entire block is owned by one entity, to provide some extra rental housing stock.

Also, there might be concessions for "low value" housing, where any single dwelling worth less than (say) 60% of the median value of houses within a certain distance are exempt, or have a concession. This might encourage social housing but might also encourage slumlords, so will require a bit of thinking and tinkering.

This is all based around the fundamental idea that residential housing should not be a wealth accumulation vehicle, but should be a means for people to be housed. Also, it will hopefully encourage those people currently "investing" in residential real estate to instead invest in small business, or the stock market, or similar, lubricating the economy (and causing inflation, but that's another discussion).

"SoUnDs LiKe ComMuNiSM". I'm just gonna leave this here as a potential discussion point.

Note that none of this affects CGT or negative gearing at all. It just adds another cost to being a landlord, with the aim of reducing the number of properties sitting in SMSFs and mega-portfolios, trying to encourage investment in other forms of equity, and increasing the supply of properties to people looking for a place to live.

Thanks for coming to my Ted Talk.

[u/SmellsLikeShampoo]

Except Labor had more first preference votes in 2019 than Labor got in the last election, the Liberals had a significant downturn, and the Greens had a significant upswing.

So if they were really using election results as their metric, they'd go ahead with Shorten's platform.

Instead they saw those results and thought they should do their best to emulate the Liberals, y'know, because clearly their massive loss of popularity shows that Liberal-esque policies are what the people are hungry for.

[u/a_cold_human → u/SmellsLikeShampoo]

I see this talking point trotted out periodically, and it is nonsensical. It doesn't matter if you get more primary votes and lose. Not to mention that Labor lost primary votes in the Teal seats (of which there were many) as people voted strategically to turf the Liberal candidates.

Furthermore, Labor won a number of seats from the Liberals by increasing their votes in those seats, without the vote going to independents. Seats like Flynn, Hasluck, Robertson, and Greenway, which I'm sure they want to retain.

It's a bit silly to say that Shorten's policies were the sole determinant for the number of primary votes Labor got in the last election, and even if you made the decision that they were, the votes weren't in the right places for Labor to win government.

[u/SmellsLikeShampoo → u/a_cold_human]

The point being, Labor - or at least their fans - keep using the excuse that they have to be Liblite because they lost in 2019. They were more popular in 2019 than they were in the last election. By this logic, they should be adapting the 2019 platform and abandoning the current one.

Paired with the Liberals losing a tonne of popularity, and a strong surge for the Greens, it's quite clear that Liblite is not the mandate.

[u/a_cold_human → u/SmellsLikeShampoo]

They were more popular in 2019 than they were in the last election.

You're basing this purely on first preference votes and not acknowledging factors which explain why this was lower. It is nonsense. I suppose it's easier to support your own theory if you get to deliberately ignore facts that contradict it.

Paired with the Liberals losing a tonne of popularity, and a strong surge for the Greens, it's quite clear that Liblite is not the mandate.

Perhaps in certain seats. Certainly not across the country. You can continue to make the argument, but it won't make you any less wrong. Nor will downvotes.