Housing Crisis Fix
Easing planning regulations will have more of an impact on improving housing supply than abolishing negative gearing, a new report reveals.
The report by Centre for Independent Studies chief economist, Peter Tulip, says it is restrictive planning rules that have added more than 40% to the cost of a house in cities such as Sydney and Melbourne.
The Housing Affordability and Supply Restriction report says property taxes only increase the cost of a house by about 4%.
“There are arguments from the tax policy perspective that negative gearing and the capital gains discount should be considered, but it’s not relevant to the question of housing affordability,” he says.
Tulip’s analysis shows if housing stock is increased by just 1% rents and prices should drop by 2.5%.
“The effect of those tax discounts on housing prices is tiny,” he says.
Tulip says zoning restrictions need to be relaxed and the states should consider overriding councils when necessary.
