The Property Council of Australia has unveiled a seven-point plan to help stimulate economic recovery post-COVID-19.
The plan is aimed at boosting construction, attracting investment, and improving confidence across the property industry, said Ken Morrison, chief executive of the Property Council.
"As Australia's biggest employer, which contributes over 13% of GDP, the property industry can be a powerhouse behind economic recovery and growth with the right policy settings and market incentives from the federal, state and territory governments," he said.
One of the policies included in the plan is to commence a broad-based tax reform, which will include the abolition of stamp duty. Under the council's proposals, revenue from stamp duty could, instead, be sourced from broadening the goods and services tax (GST) base in the medium term.
Citing data from Deloitte Access Economics, the council said replacing stamp duty with a broader GST base could boost consumption by $6bn to $9.6bn per year.
"This reform is in line with the recommendations of the Henry Tax Review and recognises the reality that broad-based land taxes will not be sufficient to replace stamp duty revenue, as has been demonstrated by the ACT's unsuccessful attempt to do so," the council said.
Also read: Will COVID-19 Make A Material Dent On House Prices?
The Property Council also proposed the retention of existing negative gearing and capital gains tax arrangements, which could substantially support construction and economy. The council said the construction industry and the economy would have lost $766m and $1.5bn, respectively, if the calls for negative gearing and capital gains reforms succeeded last year.
Other immediate tax improvements were also laid out, including the removal of foreign tax surcharges for commercial property and new developments, investment guarantee a permanent tax system feature, and financial incentives for energy-efficiency efforts.
The Property Council also proposed a series of policies that would encourage activity in the home-building sector. The plan includes the introduction of a $50,000 grant for 50,000 homebuyers who are planning to buy a newly-constructed home.
Additional policies from the state and territories are encouraged to complement this scheme.
The proposal also pushes for the $1bn housing infrastructure facility managed by the National Housing Finance and Investment Corporation. The council said this would help facilitate new housing projects.
The other five policies included in the Property Council's seven-point plan are as follows:
- Fast-track property and infrastructure projects from the public and private sectors that have the greatest potential to catalyse further economic growth
- Permanently address the causes of Australia's artificially high housing prices
- Ensure Australia can harness the local and international capital essential to create the housing and commercial real estate the nation needs — from retirement living villages to office towers to industrial parks
- Incorporate lessons from the pandemic period to deepen current economic strengths, foster new areas of competitive advantage, and increase resilience in the economy and our communities
- Restore Australia's traditional migration settings as a key driver for Australia's economic recovery
The seven-point plan of the Property Council can be accessed through this link.
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