Property investor tax breaks blamed for housing crisis

Affordable housing has moved beyond many Australians’ reach because the government is subsidising the private market instead of building social housing, a new report has found.

Everybody’s Home Written Off report shows the federal budget is expected to lose almost a quarter of a trillion dollars to negative gearing and capital gains tax concessions between 2010-33.

It argues investor tax breaks over the next decade could build more than half a million social homes, and have outstripped spending on social housing by at least five times.

Further highlighting the disparity, the report says government spent about $164 per person on public and community housing in 1982. By 2022, the number had shrunk to $61.

During Australia’s housing affordability high point, one in four homes was being built by government and one in three renters were government tenants.

But the government has withdrawn its support, campaign spokeswoman Maiy Azize said.

‚ÄúIn the midst of a major cost-of-living crisis, the federal government is spending record amounts on housing to line the pockets of investors,‚ÄĚ she told reporters in Canberra on Monday.

“It is propping up the private rental market through tax handouts to private investors.

‚ÄúThat has made renting and buying homes more expensive than ever.‚ÄĚ

In response, the national campaign to fix Australia’s housing crisis is urging the federal government to scrap tax concessions for property investors and build more dwellings for lower income Australians.

‚ÄúTax handouts for investors will be a quarter of a trillion dollar mistake if the government doesn‚Äôt change tack,‚ÄĚ Ms Azize said

‚ÄúThese tax handouts are inflating the cost of housing, they‚Äôre commodifying housing and they‚Äôre making inequality in this country worse.‚ÄĚ

Research by property data group CoreLogic reveals rents increased 8.3 per cent in 2023, outstripping an 8.1 per cent rise in house prices and eclipsing a four per cent rise in wages.

But the Property Council’s national policy and advocacy executive Matthew Kandelaars says Everybody’s Home’s proposal won’t fix the housing crisis.

‚ÄúThe best way to support housing affordability is to ensure we have enough new homes to meet demand, including social, affordable and at-market housing,‚ÄĚ he told AAP.

‚ÄúCalls to remove investor incentives that support the supply of new homes are searching for a silver bullet that doesn‚Äôt exist and will do exactly the opposite to what is intended.‚ÄĚ

He says construction of new housing would fall under such a policy when the nation should be trying to hit housing targets by building new dwellings.

The federal government has promised to reinvigorate the sluggish home-building sector, pledging to deliver 1.2 million new dwellings over five years.

A major piece in the housing puzzle was set in place last week, with applications opening for the government’s Housing Australia Future Fund.

Housing Minister Julie Collins said the fund, along with the National Housing Accord, would deliver 40,000 social and affordable rentals in its first five years.

The government is also aiming to deliver 4000 new social homes through a $2 billion fund.

 

Kat Wong
(Australian Associated Press)

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