What Permanent Home Markets Means for Australians

Kevin Cox
3 min readFeb 7, 2024

Permanent Home Markets mean affordable housing for all, and the following scenarios compare what is happening today with what will happen with a Permanent Home Market.

See a video of this article.

See a video explaining Permanent Home Markets.

The Negatively Geared Investor

Today, a negatively geared investor can reduce their tax if the loan cost and other costs exceed the income generated by the investment.

Assume an investor has a 6% loan of $1,000,000 over 20 years and purchased a rental property that rents for $1,000 a week. Assume the other costs of renting are $24,000, the interest costs are $60,000, and the loan is reduced by $27,185. The loss on the business is $57,000, on which a tax rebate of $21,000 is obtained. The investor pays out $84,000. The loan reduction plus the rebate is $48,185, so the investor $84,000 has lost about $32,000 and may get a Capital Gain on the property, which will be taxed if they sell. The bank, in contrast, has an income of $60,000 in interest.

This same investor can outlay the $84,000 and put it into a Permanent Home Market and has $84,000 in CPI-indexed wealth, earning $8,400 in income for twenty years, where 50% is Capital gains and 50% will be income.

All investors in housing will likely move to Permanent Home Markets as quickly as possible if the PHM is willing to take the mortgage off their hands by arranging a fair loan with a Community Bank.

A Landlord who owns a Property

A Landlord who owns a $1,000,000 Property will obtain an income minus costs that approximates the depreciation on the property and will retain their Capital.

In contrast, an investor with a $1,000,000 property will obtain a $100,000 indexed annuity for 20 years, whose capital will be reduced by $50,000 annually if they do not reinvest any of the annuities. Of the $100,000, 50% is Capital return and 50% is income.

A Retired Home Owner with a $1,000,000 Home

Retirees are likely to move to Permanent Home Markets as it will mean that their accommodation is secured for 25% of their disposable income. They will have the funds to reduce their cost of living, like adding solar panels and batteries to their homes, increasing insulation, and being part of group purchases of insurance, repairs and general maintenance. Services — like many aged services, will be organised through the cooperative, and they can downsize to another Permanent Home Market for the cost of movement and preserve their wealth. They could access $300,000+ in Capital for a $1,000,000 home to either earn more income or increase the value of their home.

A Renter Paying 50% of their Income

Renters paying 50% of their income can join a PHM with no deposit, and each rental payment will increase their wealth by 40%+.

A Mortgage Holder Paying a 6% loan over 20 years.

Assume a mortgage holder is paying $84,000 a year in repayments. Assume they are ten years into their repayments. They would repay their home within 6.3 years instead of ten or they could reduce their payments to $64,000 a year by joining a Permanent Home Market.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.