In yesterday’s Herald-Sun the front page screams about the Victorian Government taking too much money in stamp duty on the sale of homes. If only the stamp duty was less, they say, then houses would be more affordable. The paper is mounting a campaign and encouraging its readers to ring up or write in and put pressure on the government to cut this tax.
What rubbish. House prices in Melbourne have trebled in the last ten years. Is this because stamp duty is now half a million per house? No it’s not. It’s because there is too much money chasing too few houses. And the policies that would reduce the amount of money which drives up these prices are policies that the Herald-Sun would run a mile from. Abolishing negative gearing for rental properties would put home-buyers on a level with investors. At the moment investors – those who already own a house and are looking to buy another – have a huge tax advantage. They also benefit from the Howard government’s cut to Capital Gains tax. Get rid of these two tax breaks and the housing market would cool down. And the government would have more money for social housing and other worthy causes.
But reduce or abolish stamp duty and all you are doing is putting more money into the hands of people who are buying a house. So they can bid up the price a bit more and make houses just as unaffordable as they are now.
Still, I’m impressed with the Herald-Sun. The Age’s front page yesterday was about how the head of BHP, the world’s largest mining company, has called for a carbon tax. Now just how does this fit in with Global Warming being the greatest conspiracy of all time? I can see why the Herald Sun wouldn’t run it on their front page.
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