First home buyers should be allowed to use their super savings as security for a home loan and states should ditch stamp duty in favour of a land tax, according to a parliamentary inquiry into housing affordability in Australia.
The Coalition-dominated Standing Committee on Tax and Revenue has made 16 recommendations, many of which require action by state and territory governments or local councils to increase housing supply and improve affordability.
Committee chair Jason Falinski disputed the need for the federal government to review a number of tax concessions it offers, saying they were not a major factor contributing to high prices.
In a dissenting report, Labor MPs rubbished the committee's findings, saying the inquiry failed to address the structural problems within the housing market.
The committee recommended the federal government permit first home buyers to use their superannuation assets as security for a home loan, saying deposits presented the biggest obstacle for those trying to enter the market.
Currently, the government offers a program where first home buyers can withdraw money from their super to buy a house, but only cash they have contributed on top of their employer contributions.
"The committee recommends that the Australian government develop and implement policy allowing first home buyers to use their superannuation balance as collateral for a home, without using the funds themselves as a deposit, thereby expanding the opportunity for home buyers," the report states.
"Implementation of this policy should depend on also implementing policies to increase the supply of housing.
"Otherwise, an increase in households' ability to borrow would likely increase property prices.
"This recommendation will therefore remove the largest barrier for home buyers; being the deposit."
Stamp duty changes recommended
The committee also recommended that state and territory governments gradually replace "inefficient" stamp duty, which is paid at the point of sale, with a broad-based land tax which is paid annually.
"This should be implemented over time, avoiding those who have already or recently paid stamp duty facing double taxation through the replacement land tax," the report states.
"This change would increase housing turnover, remove an unnecessary obstacle to home ownership and stabilise government revenues."
Despite a call from the NSW Liberal government for the Commonwealth to re-evaluate capital gains tax concessions, the committee made no recommendations relating to the policy.
At the moment the concession means that if someone sells a property they have owned for more than 12 months they only have to pay tax on half of the profit, if they make one.
The NSW government's submission to the inquiry had called for that 50 per cent figure to be reviewed, while other groups over the year have called for it to be reduced.
Federal Labor unsuccessfully took a plan to halve the discount to 25 per cent at the last election.
The committee also recommended no changes should be made to the federal government's current policy on negative gearing.
"The committee believes the benefits this policy provides in the form of lower rents, higher housing supply, diversity of ownership and the efficiency of the tax system, outweigh the nominal impact it has on housing prices."
Changing tax not the answer: Falinski
Mr Falinski said the tax concessions were not a major factor contributing to high prices.
"There is a tax problem, but it sits with state and local government, and the real big issue as the analysis shows is planning laws," Mr Falinski said.
"Negative gearing and capital gains tax concessions in the top end of the market are adding possibly 4 per cent to the price, in some parts of the market it's not actually adding anything to price.
"At the same time, we ignore planning laws which analysis shows is adding 68 per cent to the price."
The report described Australian cities as "some of the least densely populated in the world" and argued state and local governments should increase urban density in areas serviced by transport infrastructure.
It also recommended the federal government give "incentive payments" to state and local governments to "encourage better planning policy" and establish schemes to facilitate private sector partnerships to deliver discount-to-market rent-to-own affordable housing.
"This will diversify the housing market as well as provide affordable housing options for low to medium income earners, people experiencing homelessness, women escaping domestic violence, parents and children," the report said.
Affordability largely states' responsibility
Mr Falinski argued that most of the "hard work" required to improve housing affordability would need to be done by the states.
"This report makes it clear we could keep talking about taxes or we could try to solve the problem by increasing supply," he said.
Labor said the report "falls well short" and accused the committee of delivering a report which reinforced Mr Falinski's preconceived view that "increasing supply would solve all".
Shadow Treasurer Jim Chalmers said housing affordability had never been worse, but Labor would not support a plan which would undermine retirement incomes.
"We don't believe in undermining the retirement incomes of Australians in order to solve this problem," he said.
"We think there are other ways to make housing more affordable in this county."
