Satterley backs C'wlth land sales, tax deductible interest

23/10/2007 - 15:59

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Selling commonwealth land to property developers and using the funds to make housing interest payments tax deductible would be a good political decision for an incoming government, according to Satterley Property Group chief executive Nigel Satterley.

Satterley backs C'wlth land sales, tax deductible interest

Selling commonwealth land to property developers and using the funds to make housing interest payments tax deductible would be a good political decision for an incoming government, according to Satterley Property Group chief executive Nigel Satterley.

In an announcement, Mr Satterley said he agreed with the broad proposal floated by both Prime Minister John Howard and Opposition Leader Kevin Rudd to sell off Commonwealth crown land for future housing, but said it would take at least three years before that land could be zoned, approved and developed.

The sale of the land would provide sufficient revenue to fund significant tax breaks for homebuyers, he said.

"I believe first home buyers should be allowed to claim their interest payments as tax deductions for between five and seven years on house and land up to $600,000," Mr Satterley said.

"If people can afford to buy their own home there's a beneficial flow-on effect throughout the whole real estate industry."

Mr Satterley also urged both political parties to reassure voters that the current first home owners' grant of $7,000 will be maintained at least at its current level.

His comments came one day after the Housing Industry Association confirmed that construction times on standard houses in Perth had fallen from around 18 months to around 7 months, a fall HIA Executive Director Sheryl Chaffer attributed to a drop in the number of building approvals.

"The fall in construction times makes sense given the ABS statistics have shown a continued fall in the number of building approvals over the last 7 months," she said.

"With fewer construction jobs on the go the builders are able to focus their resources on fewer new home construction jobs and complete them far quicker than at the height of the building boom. At the height of the building boom tradesmen and some building materials were in short supply which added substantially to the time to construct a new home."

 

 

The full text of Mr Satterley's announcement is pasted below

First home buyers should be able to claim their housing interest payments as a tax deduction.

That's the view of Australia's biggest independent residential land developer Nigel Satterley.

He is urging both major political parties to adopt this proposal as a key plank of their housing policy in the lead-up to the November 24 Federal Election.

"I believe first home buyers should be allowed to claim their interest payments as tax deductions for between five and seven years on house and land up to $600,000," Mr Satterley said.

"This would allow people to break free from the rent cycle and enable them to buy their own homes and get started on long-term home ownership.

"Importantly, it would take many of these people off the bulging state housing rental lists."

Mr Satterley is urging both John Howard and Kevin Rudd to prioritise housing affordability, claiming it could be pivotal to the result of the election.

"It's my view that whichever party presents the best workable policy on housing affordability will capture the imagination, and the votes, of the electorate," he said.

"Look what happened with the worm when housing affordability was mentioned in Sunday's debate between the leaders.

"It went sky high.

"Neither of the major parties has so far adequately addressed this major issue in a real way.

"The difference between winning and losing could literally depend on which party bites the bullet and outlines a housing policy which will enable as many people as possible to buy their own homes."

Mr Satterley said there was a serious over-supply of established housing in Australia, particularly in suburban Perth and Sydney, and whichever side wins the election must address this question.

"In Perth, for example, there are close to 18,000 properties on the market outside a 15 kilometre radius of the Perth CBD," he said.

"The normal number is around 12,000.

"In Sydney, the condition we now describe as 'housing stress' is also a major problem affecting a huge number of people in the dozens of Federal seats in the Greater Sydney Region.

"That represents a lot of votes."

Mr Satterley agrees with the broad proposal floated by both Prime Minister John Howard and Opposition Leader Kevin Rudd to sell off Commonwealth crown land for future housing but says it would take at least three years before that land could be zoned, approved and developed.

Action was needed now and Mr Satterley believes his plan for significant tax breaks could be funded by the sale of Commonwealth land, much of which was in many upmarket locations.

"This prime land would yield billions of dollars which could be used to help subsidise tax relief for the first home buyers in the way I've recommended," he said

"If people can afford to buy their own home there's a beneficial flow-on effect throughout the whole real estate industry."

Mr Satterley has also urged both political parties to reassure voters that the current first home owners' grant of $7,000 will be maintained at least at its current level.

"There is no excuse for governments, both Federal and State, not addressing the problem of housing affordability," he said.

"Let us not forget the huge amount of revenue generated by the GST on new residential homes, land and renovations.

"The peak industry bodies agree this is in the vicinity of $22-24 billion annually, compared with $2.5 billion under the old sales tax arrangement."

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