Home loan tax deductions

September 2, 2007, 7:47am,  473 views

Aussie John Symond says first-home buyers should be eligible for tax deductions on home loan interest payments. Putting aside Symond’s obvious vested interest to encourage home lending, it will be interesting to see how the political parties respond.

Howard and Rudd have both said they will “look at the proposal”, which doesn’t mean much at all really.

I’ll be surprised if it gains traction. Home buyers generally need stamp duty relief more than they need tax deductions.

The proposal also limits itself to first-home buyers. There are plenty of people in the housing market who haven’t made huge capital gains that also need assistance.

Stamp duty should be a flat fee of no more than $2000 for single-dwelling residential properties. And there should be incentives for banks to offer fixed term loans over 20-30 years at affordable interest rates, as they do in America.