Then, a study released this week reveals that more than half of older Australians, classed as those aged 55 and over, are interested in downsizing, if suitable homes were available. Loading The link? Even as young Australians can’t afford the homes they want, many older Australians say they don’t want the homes they currently have. A mismatch, of sorts. Indeed, the survey of more than 2400 “later life” Australians (don’t write to me to complain, it’s their terminology) by researchers for the Australian Housing and Urban Research Institute found about a quarter had already downsized, and almost a third would like to. This is not to say that older Australians are suddenly keen to live in the shoeboxes younger Australians are forced to habitate.

While two-thirds of downsizers have moved into homes with fewer bedrooms, more than half still moved into homes with three-plus bedrooms. I have, in the past, been accused by a lovely but somewhat theatrical baby boomer commentator for being a “selfish brat” and a “short-sighted whinger” for suggesting such spaces could be better utilised by larger families. And the survey confirms that older Australians are not on my side. “The assumption that spare bedrooms represent underutilised space is not a view shared by older Australians.” House prices are on a tear ... again. Credit:Peter Rae Indeed, of those surveyed, 58 per cent consider extra rooms necessary for permanent guest rooms, studies (50 per cent), or dedicated rooms for children or grandchildren (31 per cent). Which is nice work, if you can get it. My view that our current housing supply could be better utilised is a view, however, shared by economists and the public policy making community at large.

This brings us to the final strand of this story and findings released this week from an ongoing review by former Telstra CEO David Thodey of state and federal financing arrangements, being conducted for the NSW government. Loading Out of 33 written submissions to the review, more than half raise the issue of the distorting effects of stamp duty on property purchase. Of course, all taxes distort activity. Levy high rates of tax on income and people work less. Charge high taxes on profits and companies invest less or move offshore. The activity that stamp duty distorts and discourages is home purchase and transfer.

As a recent first-home purchaser, the more than $30,000 donation I just made to state coffers both delayed my entry into the market and meant I had to borrow more than otherwise. But it’s not just younger people negatively affected by stamp duty. Loading Replay Replay video Play video Play video Would-be downsizers are also discouraged from switching homes by the significant tax hit they’d face if they do. It may not be the primary thing keeping older Australians in their larger family homes, but it must be a factor for many – a suggestion also made by the Thodey review. “Throughout the consultation period, we consistently heard how transfer duty is a costly tax that impacts citizens’ freedom to move throughout the seasons of life. We also heard how it can often have the worst impact on first home buyers and seniors. By hindering mobility, we heard stories of people living in housing that doesn’t meet their current needs.”

Of course, we know taxes must be paid somehow to fund the critical services - hospitals, schools and roads - that we all use. The critical question the Thodey review is still asking is this: How best to raise the money we need? Answer: not the way we currently do it. This is not a surprise, given former Treasury Secretary Ken Henry said the same thing in his tax review over a decade ago, advocating that stamp duties be axed and replaced with a broad-based and ongoing annual land tax. Unlike its scare campaigns on reform of capital gains tax and negative gearing, the property sector is also backing the push for reform of stamp duties.

According to the Property Council of Australia’s submission: “Stamp duty distorts business decisions, locks families out of housing choices, worsens housing affordability, suppresses economic activity and leaves governments with highly volatile revenue streams.” Furthermore: “lt is a tax that is a relic from our colonial past, representing a stamp of the state’s authority over property transaction that has absolutely no economic relevance in our modern Australia.” The Thodey review is now looking at how stamp duties could be abolished and replaced by an appropriate source of replacement revenue, like an expanded land tax. Loading Such a switch could not only ease barriers to entry to home ownership for younger Australians, but also make downsizing an easier financial decision for older Australians. Of course, introducing a new tax – even a modest and progressively levied one - on every home in Australia would require the sort of political skill and salesmanship we’re rather short on at the moment.