Latest reforms will ‘dampen investment in new housing’
Industry experts say the new tax measures will 'make it harder to deliver the homes Australians urgently need'.
TAX reforms that passed through the Senate this week “are a major setback for housing supply”, with a peak body warning “the measures should have been ‘red carded’ before being legislated”
Housing Industry Australia chief executive industry and policy Simon Croft said the reforms risk compounding Australia’s already critical housing shortage by undermining confidence and reducing capital flowing into new residential construction.
“These changes send exactly the wrong signal at the worst possible time and represent multiple own goals in the national effort to boost housing supply.” Croft said.
“Australia is in the grip of a housing supply crisis, yet these measures will dampen investment in new housing and make it harder to deliver the homes Australians urgently need.”
HIA said the scaling back of negative gearing and CGT settings would weaken measures that have historically supported investment in residential construction, particularly in the delivery of new housing stock.
“The reality is that investors play a key role in funding new housing. Curtailing these incentives will lead to fewer homes being built and place further upward pressure on rents and prices,” he said.
“At a time when all levels of government say increasing housing supply is the top priority, these reforms are an own goal.
“They actively work against that objective by discouraging the very investment needed to deliver new homes.”
HIA also warned that changes to SMSF investment rules would strip an important source of funding from the housing market.
Croft reiterated that improving housing affordability requires policies that increase supply – not measures that discourage investment.
“These reforms should have been red carded. Australia needs policies that unlock housing supply, not restrict it,” Croft said.
HIA urged the government to work closely with industry to mitigate the impacts of the changes and refocus efforts on practical solutions, including planning reform, faster approvals, cutting red tape and greater land availability.
