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Housing inquiry recommends using super for loan security
First home buyers should be allowed to use their super as security for a home, the highly anticipated inquiry into housing affordability has found.
Housing inquiry recommends using super for loan security
First home buyers should be allowed to use their super as security for a home, the highly anticipated inquiry into housing affordability has found.
Following a seven-month parliamentary inquiry, the House of Representatives Standing Committee on Tax and Revenue tabled on Friday its much-anticipated report into housing affordability and supply in Australia.
The report makes 16 recommendations to “cut the Gordian Knot of oppressive regulation, muddle-headed central planning, officious big state regulation and the skinning of new home buyers via a myriad of taxes and charges designed to raise funds not living standards” - as put by committee chair Jason Falinski in his foreword.
While much of the report centres on the federal government’s role in relation to improving planning processes by financially incentivising state and local governments, the recommendation particularly thought-provoking for millennials relates to their super.
Namely, one of the 16 recommendations made by the committee suggests allowing first home buyers to use their superannuation assets as security for a home loan.
In the 208-page long document, the committee asked the Australian government to develop and implement policy allowing first home buyers to tap into their super as collateral for a home, without using the funds themselves as a deposit.
“This recommendation will therefore remove the largest barrier for home buyers, being the deposit,” the report says.
The report also asks the states to ditch stamp duty and replace it with land tax.
This, the committee found, should be implemented over time, avoiding those who have already or recently paid stamp duty facing double taxation through the replacement land tax.
“This change would increase housing turnover, remove an unnecessary obstacle to home ownership and stabilise government revenues,” the report reads.
A majority of the report’s recommendations focus on increasing housing supply, with the federal government instructed to incentivise state and local government to directly tie taxes and levies to actual and meaningful infrastructure.
“We need to reform broken planning systems, fix inefficient regulation,” Mr Falinski said in a statement accompanying the report.
Also featured among the recommendations is a nod to negative gearing, with the committee finding current policy should be retained.
“The committee believes the benefits this policy provides in the form of lower rents, higher housing supply, diversity of ownership and the efficiency of the tax system, outweigh the nominal impact it has on housing prices,” the report says.
Moreover, the report makes recommendations regarding emerging housing models in Australia, including rent-to-own and build-to-rent housing.
"It should not need to be stated, but home ownership matters," Mr Falinski said on Friday.
"At at the end of our months-long investigation, it does need to be reasserted that our nation was founded to be a classless society in which everyone got a chance to own their own home."
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