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Another measure meant to address the nation’s housing crisis has stalled before Parliament, as the government tries to change the conversation on its housing efforts.
Tax incentives meant to spur foreign investment into the build-to-rent space have been put on ice, as the government’s legislation on the matter was stripped from a bill before Parliament owing to opposition from the Coalition and the Greens, and will head to an inquiry with a report due by 4 September.
The proposed legislation would see the final withholding tax rate on eligible fund payments from managed investment trusts reduced from 30 per cent to 15 per cent on build-to-rent projects, and increase the rate for the capital works tax deduction from 2.5 per cent to 4 per cent per year.
The Coalition has signalled that it intends to oppose the plan entirely, criticising the government for putting homes in the hands of foreign investors, rather than Australians. The Greens, meanwhile, appear open to moving the legislation forward with strengthened mandates for the subsequent developments to provide affordable housing.
As currently proposed, to qualify for the tax break a minimum 10 per cent of dwellings in a development would need to be made available as affordable tenancies at below three-quarters of market rent.
With the government’s shared equity scheme, Help to Buy, also stalled before the Senate, Housing Minister Julie Collins slammed the Coalition and Greens for their latest effort to block the government’s plans.
“The Liberals’ and the Greens’ anti-housing alliance have never seen a new home they won’t try and block in Parliament,” she said.
It’s another blow for the government, which has set a high goal to deliver 1.2 million new homes to the market in five years, beginning on 1 July 2024. It’s been estimated that the build-to-rent incentives could result in the construction of at least 150,000 homes.
Switching the spotlight to infrastructure
Undeterred from moving forward with its housing agenda, the government unveiled a new investment in infrastructure, with $1 billion set to be split between the states and territories to support home construction.
To be delivered through the Priority Works Stream of the Housing Support Program, this funding builds on the $500 million it has already pledged to the task.
The funds can be used by states and territories to build the amenities that are essential for home construction, such as roads, sewers, energy, water and community infrastructure, and for new social housing.
States and territories will be required to provide implementation plans for the Priority Work Stream by September 2024 that will outline the specific projects they intend to complete.
In announcing the funding, Collins emphasised that the government would continue looking for ways to build more homes, with added supply the “best way to address Australia’s housing challenges”.
“We know we need the right infrastructure to get homes on the ground more quickly, which is exactly what this new funding will help deliver,” she said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
