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

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 ...