Federal budget fails to stimulate property

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It seems that the 2012-13 federal budget has failed to stimulate the property or even missed the opportunity to help everything property related.

Property representatives have expressed their dismay on how the government came up with their budget decision. It looks as if the property, aside from the help given to families for the rising costs of living and the continued support to the Housing Affordability Fund and the National Rental Assistance Scheme, has been completely left out from the budget.

The supposed legislation to give tax breaks for green buildings program or the energy-efficiency upgrades for commercial buildings was one of those that didn’t make it to the budget despite of the commitment being part of the 2010 government election.

The Housing Industry Association believes that the budget contains nothing on how to deal with the weakness in residential building, housing shortage and housing affordability. Andrew Harvey, HIA’s Senior Economist shared, “At a time when new home building is in decline in virtually every state and territory, the Budget has failed to deliver any new measure to reinvigorate the home building sector, despite the sector’s health being absolutely crucial to a healthy domestic economy.”

Harvey believed that, “the Budget was an opportunity to introduce measures to progress housing supply-side reforms with the states and territories, reduce the excessive tax burden on new housing, and expand and extend existing measures aimed at boosting housing supply.”

“Without dedicated housing policy measures and housing supply-side reforms  the residential building sector will continue to act as a drag on the macro-economy and the nation’s growing housing shortage will continue to place undue pressure on  the household budgets of home buyers and renters,” added Harvey.

Amanda Lynch, the CEO of the Real Estate Institute of Australia (REIA), also expressed her disappointment over the budget and at how the government is just passing the responsibility of addressing housing affordability to the RBA. Lynch stated, “The good news is the Budget retains conditions where further rate cuts are possible. But as we have seen last week, there is no guarantee cuts will find their way to borrowers.”

Lynch went on saying, “We had hoped the Government would recognise the need to directly intervene  and not leave  housing affordability dependent solely on the whim of the banks. One of the most effective housing policy instruments in assisting first home buyers is the First Home Owners Grant, but it has been allowed to lose more than half its value relative to purchase prices since itwas introduced in 2000. The Budget might fund new cost of living relief for Australian families but it fails to address what most Australians see as a priority – housing affordability.”

Another property related misstep found by the Property Council of Australia on the 2012 federal budget is the increased tax on foreign investment in property trusts. An article at theProperty Observerhas PCA chief executive Peter Verwer saying, “This desperate and cack-handed doubling of the tax sends an appalling signal to international investors.

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