The Federal Opposition has promised to repeal Labor’s property tax changes if it wins government in 2028.

And the Opposition would invest $5 billion in enabling infrastructure for new housing development, reduce the size of the National Construction Code and limit migration to new housing completions.

In his budget reply speech last Thursday, Opposition Leader Angsu Taylor said that the Coalition would take several housing related policies to the next Federal election.

These include:

• Repealing changes to negative gearing and capital tax that were announced by the Government in last week’s budget.
• Investing $5 billion in enabling infrastructure such as sewerage, water, electricity and local roads to help enable new housing development.
• Scrap Labor’s $10 billion Housing Affordability Future Fund and build-to-rent tax breaks.
• Cut migration and cap immigration numbers based on the number of new homes which are completed.

A key part of Taylor’s pledge involved opposing and repealing Labor’s changes to property taxation arrangements.

As announced in last Tuesday’s budget, the Government intends to make several changes to negative gearing and capital gains tax.

Under the Government’s reforms:

• From 1 July 2027, negative gearing will be restricted to new or newly built housing. Existing arrangements will remain unchanged for all properties held before Budget night, and investors who buy new builds will still be able to deduct losses from other income. Investors who buy established housing after Budget night will still be able to deduct losses against residential property income. They will be able to carry forward unused losses to future years but won’t be able to deduct them against other income like wages.
• From 1 July 2027, the existing 50 per cent Capital Gains Tax (CGT) discount will be replacedwith a discount based on inflation and a minimum 30 per cent tax on gains.

In his budget speech, Treasurer Jim Chalmers said that the changes were about addressing intergenerational equity challenges and making it easier for Australians to own their own home.

In defending this assertion, the government cited Treasury modelling which indicates that the changes will help 65,000 more Australian households to own their own home.

In his reply speech, however, Taylor said that the changes were an ‘assault on aspiration’ that would ‘crush the reward for hard work spirit’ that underpins our nation’s success.

As for helping with the housing situation, Taylor said pointed to Treasury modelling which also suggests that in fact, the changes will lead to 35,000 fewer homes being constructed.

As a result, he said that the Coalition would ‘fight like hell’ to prevent the taxes from becoming law and would repeal the changes if elected to Government in 2028.

Beyond taxation, Taylor also promised several measures which he said will help to unlock new housing supply.

Chief among these is a $5 billion Housing Infrastructure Fund, which Taylor says will help to unlock up to 400,000 new homes by funding critical last mile infrastructure.

This includes water, sewerage, power and access roads.

This initiative is similar to a $5 billion housing infrastructure promise that was taken by the Coalition to the last election.

It is similar in concept but larger than a $2 billion program to fund enabling infrastructure which the Government announced in the budget.

In addition, the Coalition would like to slash the size of the three-volume National Construction Code from around 2,000 pages to around 200 pages  ‘without compromising core safety standards’,

This will be done by rolling back recent additions such as seven-star energy efficiency requirements and paring the code back to core safety standards.

It claims that doing this – along with broader deregulation – will cut the cost of building a new home by up to $70,000.

Finally, the Coalition plans to cap the level of migration to ensure that Australia can only bring in as many people as it can house.

Under this plan, net overseas migration will be capped each year at the number of new homes which are completed throughout the country.

Each year, the Minister for Housing will report to Parliament on the number of new homes completed. That number will then set the ceiling for net overseas migration in the following year.

According to the Opposition, this will substantially help to improve housing affordability by reducing the demand for new housing.

It blames the current Labor Government for what it says is a surge in migration numbers that has seen home ownership slip further out of reach for more Australians.

In his statement, Taylor said that the measures which are outlined in the budget reply will help to create a better and fairer nation.

“I’m not under any misapprehension. There is much work the Coalition must do to win your confidence,” he said.

“But with the policies I’ve announced tonight and the vision I’ve outlined, I hope you can begin to believe again.

“Believe in our promise of better government. Believe in the prospect of a fairer, freer and better Australia.

“That Australia is worth fighting for now more than ever. And that starts tonight.”

Applause from builders

Building industry lobby groups broadly welcomed the measures.

In a statement, HIA Managing Director Joceyln Martin praised commitments to reverse tax changes, reduce the regulatory burden, tie migration to housing and invest in ‘last mile’ infrastructure.

“Taken together, the Coalition’s Budget-in-Reply pushes for greater ambition to meet Australia’s housing targets and address the structural challenges facing the economy. Key amongst this is boosting the investment in enabling infrastructure and reducing regulatory costs to unlock more housing supply faster,” Martin said.

“HIA looks forward to working constructively with all sides of politics to progress reforms that strengthen productivity, support businesses, and deliver more homes for Australians.”

Oscar Stanley, National President of the Urban Development Institute of Australia, agrees.

“Australia is in a chronic under-supply of housing and UDIA welcomes any policy which increases supply and the Coalition’s commitment to enabling infrastructure will help Australia build more homes – this is a strong start,” Stanley said.

““The Coalition’s proposed infrastructure and housing supply measures would help drive the sort of productivity we need to help combat challenges such as supply chain shocks.

“UDIA looks forward to working with the entire political leadership to implement initiatives that have the potential to accelerate the delivery of all types of housing.”

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