Demolish, Subdivide and Build
2008
Time for a back flip!
In my previous blog I intimated there was a shortage of quality property in Australia. I stand by this statement. I also said that stamp duty was not a major cause of the property bubble. Well on reflection, the statement about stamp duty was off the mark. Stamp duty and other government charges have led to a reluctance of certain citizens of our great land to move to smaller or more practical dwellings. Maintaining a huge property is hard work and expensive, yet many prefer this to forking out mega bucks for stamp duty and other fees. This reluctance has led to short supply in most areas near popular schools and infrastructure.
How do we solve this problem? I think the only way is to promote subdivision.
As I have previously endorsed, the ability to subdivide the land that your house occupies and build two or more townhouses is the ultimate value in property investing. You can’t subdivide a flat or unit generally.
Tax breaks for principle place of residence owner developers is the answer. Allow them to roll the profits into their super tax free. Allow it as a once off per person in their life time. Makes more sense than the first home owners grant, creates some liquidity in the market and it may give the Government some savings on pensions etc. We all know an elderly lady who has lost her husband but still lives in the grand mansion and gets a pension don’t we? Why not help her into a better equipped, up to date townhouse that is virtually maintenance free?
Demolish, subdivide and build! That’s my motto.
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