Labor\u2019s controversial tax changes will worsen housing supply and slash the number of new builds by 35,000, would-be buyers have been warned.<\/p>\n
The government\u2019s plans to slash the 50 per cent capital gains tax discount and roll back negative gearing have come under the microscope during a Senate inquiry this week.<\/p>\n
Labor was reminded of forecasts by Treasury that its tax changes will cause a 35,000 decline in the number of new builds over the coming decade.<\/p>\n
Housing Industry Association’s managing director Jocelyn Martin said this forecast was a blow to Labor\u2019s budget which aimed to bolster \u201cintergenerational equity\u201d.<\/p>\n
\u201cThat\u2019s an extraordinary admission for a policy being sold as improving affordability,\u201d Ms Martin said.<\/p>\n
\u201cYou cannot solve a housing supply crisis by making housing investment less attractive. More investment builds more homes – less investment builds fewer.\u201d<\/p>\n
The HIA is one of dozens of groups and individuals appearing at the two-day inquiry.<\/p>\n
It was joined by Master Builders Australia (MBA) which argued more favourable tax settings were needed to boost \u201cproject feasibility\u201d.<\/p>\n
\u201cWe need a holistic approach taken to tax reform that leads to a turbocharging of new housing supply, instead of the ad hoc changes we have seen in this year\u2019s budget,\u201d MBA national director Darren Disney said at the inquiry.<\/p>\n
Labor will restrict negative gearing to new builds and grandfather the policy for existing owners, under its budget changes.<\/p>\n
The government has claimed this will incentivise investors to build new properties, but Ms Martin said it would primarily increase the number of owner-occupiers.<\/p>\n
\u201cBudget papers indicate that around 75,000 existing homes may shift to owner-occupiers over the next decade,\u201d she said.<\/p>\n
\u201cWhile increasing home ownership is a worthwhile goal, it does not increase the number of homes – it simply redistributes them.<\/p>\n
\u201cOur core challenge is supply, and this policy does nothing to address it.\u201d<\/p>\n
A failure to increase housing supply would deal a massive blow to the Albanese government\u2019s plan to build 1.2 million new homes between July 1, 2024 and 2029.<\/p>\n
MBA said the housing construction workforce is short by 116,000 people while Australia is expected to fall more than 200,000 behind its new homes target.<\/p>\n
\u201cOur workforce shortage requires a better targeted uplift in skilled apprenticeships, supported by a better targeted skilled migration program to fill the gap,\u201d Mr Disney said.<\/p>\n