Letter to the Editor published 12th March 2007
Crispin Hall in Saturday March 10th CT argues that government cannot reduce the cost of housing because it cannot afford to alienate the electorate through engineering a reduction in house prices. A solution to this dilemma is a variation on the shared equity proposals of Malcolm Turnbull. We leave the price of housing the same but delay the realisation of profits being made by the government on new land releases. The profits from the sale of new releases of land disappear into consolidated revenue. The government could defer the profits on new land sales to enable new home owners to get into the market or old home owners to build new homes. It could do this immediately by giving a no interest loan to the value of the profits from new land sale to the home builder. The loan is repaid when the new owner sells the house or land or in the case of developer the loan would be transferred to the first genuine dweller. The government would still get its profits from the sale of the land – but it would be deferred. People would be able to afford to build new dwellings, and the price of existing residential dwellings would not reduce. It would encourage home ownership, increase the stock of housing, be easy to police and be done “tomorrow”.