The Nexus Between Property Taxes and Housing Market Behaviour

The Elephant In The Room Property Podcast | Inside Australian Real Estate

Ever wondered why economists seem to favour land tax? What happens if we get rid of stamp duty on houses? And why do some people say negative gearing and capital gains tax discounts are bad? We're here to unpack these questions and more.

Join us in this episode as we explore the often-debated topics of negative gearing and the capital gains tax discount with Chief Economist Michael Blythe, whose recent paper, "In Praise of Negative Gearing" has stirred up quite a buzz. We dive into the insights and arguments he presents and uncover the nexus between property taxes and housing market behaviour.

Whether you own a home, rent, or just want to know more, this episode is for you. Hit play and let's get into the nitty-gritty of property taxes and the housing market!

Episode Highlights:

00:00 - Introduction

01:06 - Who is Michael Blythe?

01:43 - What role does tax play in property market challenges?

03:49 - Historical context: Negative gearing and CGT discounts

10:03 - Did property prices really slow down without negative gearing?

17:06 - How has the ACT's taxation change affected property prices?

25:37 - The pros and cons of an expensive property market from a societal standpoint

29:46 - Is negative gearing detrimental to both home buyers and renters, as some argue?

34:36 - Where does the economy currently stand in terms of inflation control?

37:37 - Is the economy headed for higher prices and a cost-of-living crisis?

40:00 - The limitations of using interest rates as a tool to manage inflation

44:17 - The downsides of downsizing

50:29 - How does the aged care system impact housing availability?

52:04 - The interplay between property investing, negative gearing, and taxpayer costs

57:27 - Michael Blythe’s property dumbo

About Our Guest:

Michael Blythe is a respected Chief Economist and senior executive with extensive experience in economic policy and financial markets. He has worked across both Commonwealth Bank of Australia and Reserve Bank of Australia and brings great knowledge of, and insight into, the Australian and global economy, economic policy and markets.

Connect with Michael Blythe:

• LinkedIn https://www.linkedin.com/in/michael-blythe-272a1688/
• Website https://www.downsizer.com/

Resources:

• Visit our website https://www.theelephantintheroom.com.au
• If you have any questions or would like to be featured on our show, contact us at: The Elephant in the Room Property Podcast - [e-mail]
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