LABOR TO PROVIDE TIMELY BOOST TO HOUSING MARKET
A vote for a Shorten Labor Government is the only way to guarantee Australians have a government that prioritises housing affordability, puts first home buyers on more of a level playing field with property investors, and reforms an overly generous property tax system in a way that is fair, more sustainable and boosts housing supply.
Today Labor is announcing the next part of our housing plan – getting more houses built and available for rent by encouraging institutional investors into the housing market.
Labor will revamp the Build to Rent scheme – giving institutional investors better tax concessions, encouraging more construction and stimulating the housing market.
We will cut the managed investment trust withholding rate in half, on tax distributions attributable to investments in build-to-rent housing. The rate will be lowered from 30 per cent to 15 per cent – encouraging new housing supply.
Build to Rent provides more stable long term tenancies and more housing in desired locations close to public transport and close to employment opportunities. This is good for families who want to spend more time with each other, and less time travelling to and from work.
Many families around Australia have faced the situation where they’ve tried to create a comfortable home, but unexpectedly have been forced to move after their landlord decides to sell their investment and move on.
Boosting affordable and stable rental accommodation has a double dividend – it is critical for Australia’s 2.7 million renters that can’t afford to buy a home or are saving to do so, and it boosts construction jobs and economic activity.
This builds on Labor’s existing reforms to encourage new housing growth, including:
- Retaining and putting negative gearing to work by focusing it on new properties;
- Providing incentives to build 250,000 affordable houses over the next decade.
These changes to negative gearing and the capital gains tax discount will commence from 1 January 2020, including:
- Retaining negative for new investment properties to help boost housing supply and jobs;
- all existing negative geared investment properties made prior to the 1 January 2020 fully grandfathered; and
- the capital gains tax discount halved for investments entered into after 1 January 2020.
If you already use negative gearing, nothing changes. It’s not retrospective. And you can still use it for new houses. Federal Labor’s reforms to negative gearing enjoy the support of many independent economists and think tanks like the Grattan Institute and Saul Eslake as well as international economic agencies like the International Monetary Fund. The fact is, the benefits of both negative gearing and the capital gains tax discount (CGTD) are skewed towards the wealthy, with the Grattan Institute estimating almost 70 per cent of the benefit of the CGTD accrues to the top 10 per cent of income earners. The Morrison Government has no policies, no plans and no leadership to encourage new housing investment. Scott Morrison personally mishandled and stunted the growth of Build to Rent in Australia – by unilaterally and without notice banning managed investment in the scheme on Friday 14 September 2017, before partially back flipping on this in July of last year.
Federal Labor’s plan is good for the budget, good for housing construction jobs and fair for first home buyers.
At the next election there’s a choice: the Liberals’ plan to stand up for banks and top end of town, or Labor’s plan to fix our schools and hospitals.
The independent Parliamentary Budget Office has costed our policy to reform negative gearing and the capital gains tax discount. It will raise $2.9 billion over the forward estimates (to 2022-23) and $35.1 billion over the medium-term (to 2029-30). The PBO has also advised that the Build-to-rent policy would have an unquantifiable financial impact.
FRIDAY, 29 MARCH 2019