The radical real estate solution that's helping Australians in one major city save MILLIONS on housing costs every year
A radical real estate solution helping Australians save millions on housing costs has been revealed. About 1,000 households in Canberra are saving $9million every year by renting the land their houses sit on instead of buying it...
Economics lecturer Cameron Murray said it helps renters secure long-term home ownership while saving 'about half' their housing costs. Renters pay two per cent of the market price of their property each year to the government.
"As long as they pay the [ground] rent, they can occupy it for life," Mr Murray wrote in a post for The Conversation.
So what's the downside..?
"The downside, for them, is that they forgo the increase in the value of the land. The upside is that it costs them two per cent per year instead of the five per cent interest rate they would pay if they had a mortgage. When they sell their home they built on the land they pay out the land value to the government." Mr Murray said the scheme 'works out pretty much even' for the government.
That's not a downside, future residents will be making savings equal and opposite to their notional loss.
Debate Magazine
