What the property industry wants from the budget

Tax deductions for interest payments are among of series of measures being urged by Australia’s peak real estate body.

The REIA has raised a dozen measures to support Australians in the property market over 2021 post COVID.

The Real Estate Institute of Australia has called for interest payments on mortgages to be made tax-deductible for first-time buyers, as part of a slew of measures to help property players in a post-pandemic world.

The peak industry body has outlined a dozen key issues and priorities for the property sector to be addressed in the upcoming May federal budget.

Four in five agents surveyed by the REIA last year believed that current COVID supports such as JobKeeper and rental eviction moratoriums for Australians impacted by sectors including tourism and international education should be extended.

The body also called for voluntary super contributions, an earnings assessment for first-time buyers which could be used to access the credit, and an expansion of the federal government’s five per cent first home loan deposit scheme (FHLDS) to be considered in order to allow better access to the marketplace.

REIA president Adrian Kelly

REIA President Adrian Kelly said there was a need for policies and investments that would continue to drive growth in the property market, and help property market players as Australia emerges from the pandemic.

“Wherever you are in the housing market, an agent, tenant, buyer, investor or vendor, there should be support for you in the next federal budget to have confidence to succeed in a COVID-normal Australia.”

“REIA estimates (making the interest portion of mortgage payments tax-deductible) would provide a benefit of around $4000 per annum to Australia’s first home buyers, which NHFIC places at around 15 per cent of the housing spectrum,” Mr Kelly said.

“At least six other OECD nations have a similar incentive.”

First-home buyers were the most active market segment through 2020 as the combination of low rates, falling prices and a slew of the stimulatory measures, including HomeBuilder and the expanded FHLDS, made it an attractive time to purchase. Economists expect this activity to moderate this year, particularly as investors begin to become more active as prices rise a predicted 5 per cent.

Mr Kelly called for greater financial support for the industry, which was hindered by social distancing restrictions last year. The REIA is also seeking to help real estate agents manage their cash flow in response to the disruptions from COVID-19.

“We’re proposing a kit that is a predictive tool to assess a business’s viability and while the kit can be used at any stage of the business life cycle, it is particularly useful to prevent financial stress,” said the industry body president.

“Assistance from $2000 to $5000 per agency will allow for the individual advice from a trusted adviser to improve financial viability and productivity which will assist in the government achieving a higher economic growth rate than would otherwise be the case.”