The Property Council of Australia (PCA) has lodged a submission with the Victorian government’s Plan for Victoria review whereby it has argued to exempt over-60s from paying stamp duty on their final home.
“An obstacle to homes becoming available for Victorian first home buyers is the inability of older homeowners to overcome the barrier posed by their stamp duty liability on a new purchase”, PCA Victorian executive director Cath Evans said.
“It is locking up the market”, Richard Temlett, director of research and strategy at property consulting firm Charter Keck Cramer, said. “It is preventing people from rightsizing into the right type of space to suit their needs”.
“As it stands right now we’ve got a huge ageing baby-boomer segment of the market that is asset-rich and cash flow-poor. They can’t move”.
This is an incredibly inequitable policy proposal.
While stamp duties are egregious and inefficient, it is a poor policy to provide relief to those over 60 while continuing to financially penalise younger families who are upgrading to more suitable accommodation.
If implemented, this policy would shift the tax burden away from the wealthiest generation in history to younger, poorer generations already under financial strain.
Seriously, why should a baby boomer who purchased their homes cheaply in the 1970s and 1980s and have enjoyed enormous house price appreciation and wealth receive a stamp duty concession when selling their property for a small fortune to a younger family, who is then slugged in excess of $100,000 for the privilege?
Why are over-60s more worthy of stamp duty relief than younger, growing families?
Housing mobility is a two-way street. To function correctly, the housing market must allow retirees and young families trapped in smaller homes to move freely.
If the Victorian government wishes to promote housing mobility, it should eliminate stamp duty for all groups.
What it should not do is create a privileged class of people in the form of home-owning retirees, many of whom had the good fortune of purchasing their homes at a low cost (and paying little stamp duty) before they skyrocketed in value to the detriment of future generations.
The baby boomer generation certainly does not need more housing assistance. They are wealthy enough already.
