The Australian Government has released a list of things that it says should be done to stop Australians losing their homes and businesses as a result of a property bubble.
Key points:The Government says it wants to stop the property bubble from poppingThe Government has identified a list that will be released on ThursdayThe Government is recommending that people and businesses pay their fair shareThe list includes a call to ensure that foreign investors pay the fair shareThey’re calling for the Federal Government to increase taxes on foreign investorsThe Government believes that foreign investment can be beneficial in helping to sustain Australia’s economic growth and that foreign buyers are paying a fair share.
Key Points:The list of recommendations on reducing the cost of housing includes a list to prevent the bubble from bursting.
Under the proposals, the Government will release a list on Thursday of things it thinks should be completed to ensure there are more Australians left to lose their homes.
These include a call for foreign investors to pay their own fair share of property taxes and to invest in infrastructure projects.
“The housing market is a bubble that’s going to burst, that’s what we’ve got to get our house in order before we can start rebuilding,” Treasurer Scott Morrison said.
“So we need to ensure we’re getting our house right first and we need a new approach to how we’re managing that.”
In the latest edition of the Government’s “Property Bubble Watch” website, the Treasurer says that Australia’s housing market has “crushed”.
“The Australian housing market collapsed from a very low base in 2013,” he said.
He says the Federal government will use the “Property Budget” to “build more houses than any other country in the world”.
“That’s why we’re bringing in $1.8 billion in house building incentives for the next five years.”
These incentives will help to bring down house prices by $3 billion over the next four years.
“Mr Morrison says there’s also a call on foreign buyers to “pay their fair shares” for Australian homes.”
There are other measures we can take to encourage foreign investment, such as increasing the tax on foreign ownership of Australian property,” he told ABC Radio’s The World Today.”
That means we should get a new national tax on overseas buyers and foreign buyers should pay their share.”‘
Not just for foreigners’Mr Morrison’s list includes calls for an increase in the tax paid by foreign investors in the housing market.”
We’ve been told over and over again by the Prime Minister that there are very good reasons for people to buy Australian property, and it’s fair to say that’s certainly true for people from other parts of the world, and indeed we’ve been able to encourage that in our own market,” he added.”
In other countries, there’s a strong and stable market, where you’re able to attract people, people that are willing to pay more and spend more, and that’s the case here.
“I would argue that if we’re looking at encouraging foreign investment to create jobs in our country, that that’s where our money is.”‘
Flawed’ policyThe Government’s Property Budget is the first set of recommendations to address the property market’s financial crash.
It’s called the “Foreign Investment Review Mechanism” (FIRM) and it allows foreign investors a one-off payment of up to $10,000 for property purchases.”FIRM has been criticised for being a flawed policy and a missed opportunity,” Mr Morrison said in his budget speech.
“A lot of the problems in the market are being addressed with a number of measures that have been implemented by the Federal Treasurer, including the tax exemption for overseas buyers.”
“But we’ve also been told to be very cautious about introducing foreign ownership rules because the tax relief will not work.”
For example, if you’re an Australian citizen, if your partner is an Australian national and you have a foreign partner and they buy a house, you can’t claim a tax deduction for the foreign partner.
“Mr Morrison says that there’s “no reason why foreign investors should be exempt from paying their fair market value” for properties.”
Foreign buyers should be entitled to receive the same tax relief that Australians are entitled to,” he says.”
And when we have that, we can attract investment into our economy.”‘
We can’t afford to do nothing’The Government will also be releasing a report on Thursday, calling for changes to the way the tax treatment of foreign investors is calculated.”
While the Federal Budget provides a modest package of changes, it is important that we look beyond the Budget for some long-term measures to boost economic growth,” Mr Morrion said.
The Treasurer says he wants to change the way that foreign companies are treated in the Australian tax system, including a requirement for them to pay taxes on the money they spend in Australia.”
If they’re buying a house here, they’re also responsible for paying taxes on their overseas investment,” he explained.”
What we want to do is we can’t pay