“There is significant scope for countries to improve the design and operation of housing taxes and this report provides a number of policy options to help countries implement reform.”
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The situation in Australia was particularly pronounced: over several decades, home ownership rates have been declining in each generation.
But in all cases, those with the lowest incomes have suffered the biggest falls. Among 55- to 64-year-olds, home ownership rates have fallen 16 percentage points since the early 1980s for the lowest paid, but only 1 percentage point among the top 20 percent of earners.
“Therefore, while future generations are likely to see continued declines in homeownership rates over time, households with high incomes, great wealth, and/or access to significant family resources may instead see a increase in property rates or at least a minor decrease,” he found.
Among the 29 OECD members, Australians have the second highest level of property wealth. Only the people of Luxembourg have more.
But even here, it depends a lot on income. The top 20% of Australians by income have twice as much wealth as the bottom 20% tied to their primary residence.
Australians also have the second largest amount of wealth tied up in holiday or investment properties; the highest paid 20 percent of the population have much greater levels of wealth than the bottom fifth.
The OECD said that while overall home ownership rates remained relatively high, this was partly because older generations were living longer.
The report is in line with the latest Australian census, which showed the proportion of people owning their homes had halved in most age groups over the past two decades, while the proportion of people with mortgages had increased at all ages.
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In 2001, more than one in five people aged 35 to 44 owned their home. But by 2021, the proportion of that age group who owned outright had fallen to less than one in 10.
Census data also showed that 41.4% of people aged 45 to 54 owned their home 20 years ago, but in 2021 only 18.5% of people in that age group did. age they did it.
Experts said one of the main reasons why fewer under-65s owned today and the number of mortgages had grown was rising house prices, which meant people I was taking on big debt for longer and getting into the real estate market later.
Apart from increasing housing supply, the OECD said changes to property taxes were needed. He noted the ACT’s move to phase out stamp duty on home sales, a policy NSW is considering.
He also said that the capital gains tax, which excludes the main residence, should be changed.
“Most OECD countries fully exempt capital gains from principal residences, and while there may be justification for this approach, an uncapped exemption provides far greater benefits to wealthier households and further distorts the allocation of savings in favor of the home occupied by the owner.” he found.
The OECD said governments should consider limiting the CGT exemption to the main residence, arguing it would reduce some upward pressure on house prices.
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