The Federal Government has missed a major opportunity to fix glaring holes in its flawed capital gains tax and negative gearing changes, leaving billions in new housing investment exposed to rules that fail to reflect how homes are actually delivered.
Property Council Group Executive Policy and Advocacy Matthew Kandelaars said the Tranche 2 legislation included some welcome technical improvements, particularly for retirement living, but left the biggest housing concerns unresolved.
“We’ve shown the Government the holes in its new housing carve-out and it has chosen to leave too many of them open.
“That means investment will go elsewhere and desperately needed homes will not be built.”
The legislation retains a 24-month eligibility window for purchasers of new dwellings, rather than the Property Council’s recommended 36 months, with the clock beginning from the first occupancy certificate rather than actual occupation.
The Bill also leaves unresolved concerns around staged developments, residual stock and genuine additional supply delivered through single-title housing, build-to-rent, land lease communities and substantial residential renewal.
“Twenty-four months looks tidy on a Treasury spreadsheet, but housing markets, staged communities and major developments don’t work to an arbitrary Canberra stopwatch.
“A new home is still a new home whether it is sold individually, rented on one title or delivered through a land lease community.
“Tax rules should encourage every genuine addition to supply, not pick winners and losers based on how the homes are owned.”
Mr Kandelaars said the Government’s failure to properly accommodate at-market build-to-rent was particularly disappointing.
“Build-to-rent is delivering the rental homes Australia desperately needs, yet Canberra continues to leave unnecessary barriers in its way.
“You cannot have world-sized housing ambitions with small-minded investment settings.
“This was the Government’s opportunity to ensure its housing carve-out works across genuine build-to-rent developments. It has not taken that opportunity.”
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