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'The more things change?' An overview of Australia's recent home ownership policies

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  • Judith Yates

Abstract

When home ownership is the dominant tenure form in any country, the fiscal subsidies directed towards it need continual reassessment. This paper updates an earlier study on direct and indirect assistance to home ownership in Australia, a country with a mature home ownership sector. It examines the changing pattern of deposit assistance provided to first homebuyers and the trends in indirect assistance provided through the tax system, with tenure neutrality taken as the preferred tax expenditure benchmark. It was motivated by a significant growth in real dwelling values and changes to the tax system since the mid-1980s that have resulted in increased tax concessions to owner-occupiers. Indirect assistance is shown to dominate direct assistance and is poorly targeted, with the greatest amount of assistance being provided to those households who need it least. On a per household basis, outright owners receive more than five times the amount received by those with a mortgage, with high-income outright owners receiving an estimated benefit of close to $9,000 (€5,400) per annum. Home purchasers in the bottom 80 per cent of the income distribution received less than $500 (€300) per household per year.

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File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/1461671032000071182&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Journal of Housing Policy.

Volume (Year): 3 (2003)
Issue (Month): 1 ()
Pages: 1-33

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Handle: RePEc:taf:intjhp:v:3:y:2003:i:1:p:1-33

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Related research

Keywords: Home ownership; tax expenditures; tenure neutrality; housing assistance; Australia;

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  1. Chris Heady, 1993. "Optimal taxation as a guide to tax policy: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 14(1), pages 15-41, February.
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  12. D C Thorns, 1988. "New solutions to old problems: housing affordability and access within Australia and New Zealand," Environment and Planning A, Pion Ltd, London, vol. 20(1), pages 71-82, January.
  13. Follain, James R. & Ling, David C., 1991. "The Federal Tax Subsidy to Housing and the Reduced Value of the Mortgage Interest Deduction," National Tax Journal, National Tax Association, vol. 44(2), pages 147-68, June.
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