Tax church properties, consider capital gains

As a developer involved in construction of affordable senior rental housing projects over the past several years, it is alarming to see how many seniors with limited pensions are struggling to find affordable rental accommodation.

The general population is also challenged to find affordable rental housing.

Monthly rentals for apartments have almost doubled in Victoria during the last six years. $1,080 per month for a one-bedroom apartment is now $2,100 per month.

The tsunami of retirees and others finding themselves in housing predicaments will increase homelessness and further pressure governments at all levels on housing availability and affordability.

The result may be for governments to introduce more “quick fix” solutions.

Two that seem obvious to me are both tax-policy changes:

1. Property tax to apply to all faithbased organizations. These institutions are tax-exempt, sitting on property that can accommodate housing. Result, additional well-located housing sites listed for sale.

2. Sale of residential housing to be subject to capital gains tax. Currently, capital gains are not taxed on home sales. Simply announcing that this is coming and will apply to sales over a threshold price (say $1,500,000) in one to two years, would result in many properties being listed for sale in that time frame.

Result, lower prices as supply exceeds demand.

A third solution to reduce housing price is long-term land lease. Stay tuned for more on this solution.

Peter Daniel

Woodburn Management (2010) Ltd. Victoria