It would greatly increase House prices which would be the...

It would greatly increase House prices which would be the Problem . You'd have people in my Situation ( Owning out right say a 600k house ) , moving into a 1.2 mil house , it would push the prices at Every level of the Market .

With regard to Negative gearing , which I personally use , I believe a good approach would be similar to that criteria used for the FHOG , and that being that you could only Gear a New Property . When this property was sold CGT would be payable , however the next purchaser could not negatively gear .

This would produce a Stimulus were its needed , not just with established Property .

Also , many do forget its not just property that is affected by Gearing , although property is the prominant asset class used .