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Minister rules out tax breaks for home loans

Minister rules out tax breaks for home loans

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Date Published : Tuesday, June 17, 2008

Federal government housing minister Tanya Plibersek has rejected a call to introduce tax breaks on home loans for first-time buyers, saying they would not be the fairest way of helping people onto the property ladder.

According to news.com.au, John Symond of Aussie Home Loans had asked for tax benefits to be brought in as a way of tackling the affordability crisis currently facing many of Australia's prospective homeowners.

However, Ms Plibersek said making loans tax deductible would ultimately help high earners who had spent the most on their property, not those on low-incomes.

"If you are wealthy and have bought a very big house, then you get a much, much bigger benefit," she told Channel 9.

Instead, the sites says, the minister called for the construction of more affordable housing, especially "entry-level" properties aimed at first-time buyers.

"We need to make sure that those house and land packages or units are coming onto the market more quickly so that the developers aren't passing on lots of expenses, holding costs, interest rates and so on onto the people who are buying them," she said.

According to a senate committee report released this week, the average price of a home in the 1980s was three to four-times the average national wage. Today it is seven times the average salary.

The report contained 20 recommendations for easing pressure on those looking for a home loan, including bigger grants for those looking to build their own property.

According to figures from the Australian Bureau of Statistics, house prices in Australia's eight sub-national capital cities increased by 13.8 pet cent between March 2007 and March 2008.

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