New roadblock for Albo’s housing big plan
Written by admin on September 4, 2024
One of the cornerstones of the Albanese government’s bid to tackle the housing crisis is in trouble, with the Coalition preparing to block legislation saying it promotes a “rent forever” approach.
Legislation for Labor’s Build to Rent scheme is aimed at increasing the of number rental homes in the Australian market by providing tax cuts for the construction of rent-only developments.
In response to a Labor-led senate committee report which recommended the legislation be passed, both Coalition and Greens members said filed dissenting reports.
The Coalition argued the scheme was a sign the “Albanese government has given up on home ownership” and would benefit institutional investors more than perspective homeowners.
“This Bill seeks to entrench tax advantage for institutional investors in a thinly veiled attempt to corporatise the Australian housing market,” Liberal committee members Andrew Bragg and Dean Smith said.
“Build to Rent has had minimal cut-through in Australia because our tax settings are designed to favour individual, ‘mum and dad’ investors, not institutions.”
The two pieces of legislation – Treasury Laws Amendment (Build to Rent) Bill 2024 and Capital Works (Build to Rent Misuse Tax) Bill 2024 – the looks to incentivise the construction of new build to rent developments through tax incentives.
However the Bills remain blocked in the Senate.
Senator Bragg, who was the committee’s deputy chair and is opposition home ownership spokesman, said the legislation prioritised a “rent forever approach”
“In this nirvana for vested interests, (super funds) BlackRock, Vanguard and Cbus will own Australia’s houses instead of the people,” Senator Bragg said.
“It is a truly warped priority amid a housing crisis.
“Rather than promoting broad based supply and helping first home buyers, Labor is worried about the interests of the super funds and fund managers.”
The Greens maintained the legislation in its current form would “not do a thing to fix the housing crisis,” flagging issues with the amount of affordable homes which would be built under the scheme.
“The government will not fix the housing crisis by giving out tax handouts to property developers and foreign investors to build luxury apartments that almost no-one will be able to afford, with no protections against unlimited rent increases,” Greens senator Nick McKim wrote in his dissenting report.
Although the Bills stipulate 10 per cent of the dwellings under the scheme must be considered “affordable,” Wednesday’s reports found Treasury had not completed modelling on how many “affordable tenancies may be available to low-income earners”.
The cost of affordable homes is also marked as just under 75 per cent of market rent, which the committee acknowledged meant the “affordable offering may only be affordable for moderate income earners”.
Instead Senator McKim argued the commonwealth should work with states and territories to freeze and cap rent increases, and directly fund more public housing.
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He also called on the government to take up the Greens’ plan to establish a public developer to build homes which would be sold at cost-price to first-home buyers, or rented out at below-market rates.
“While the federal government has previously claimed that tenancy conditions are exclusively a state and territory responsibility, it should be noted that this bill mandates that eligible build to rent units must offer three-year leases, demonstrating that the government can make interventions into tenancy conditions,” he wrote.
However the report said build to rent schemes “should be further encouraged” as it offered a “a range of benefits to tenants that may be superior to the private rental market”.
