Around $1.3 billion worth of Federal Government money currently given to states to help subsidise affordable rental homes will be conditional upon states delivering upon housing supply targets and reforming their planning systems as part of a suite of new measures designed to increase housing supply and affordability.
Unveiled by Federal Treasurer Scott Morrison in his Budget Speech 2017, the measure is part of a package of measures designed to unlock critical housing supply across major cities.
Under the measures, the Federal Government will replace the current National Affordable Housing Agreement which provides $1.3 billion each and every year to the state and territories with a new set of agreements which will contain the same levels of funding but which will be conditional upon states delivering upon housing supply targets and reforming their planning systems.
Other measures included on the supply side of the equation include:
- Establishment of a new $1 billion National Housing Infrastructure Facility based on a UK model to fund ‘micro’ city deals which remove infrastructure impediments to developing new homes.
- Establish a Commonwealth land registry detailing Commonwealth sites on which land could be made available for residential development.
- Establish a new National Housing Finance and Investment Corporation to provide long-term, low cost finance to support more affordable rental housing. States and territories will also be encouraged to transfer stock to the community housing sector.
- Enabling Managed Investment Trusts to be used to develop and own affordable housing, providing investors in affordable housing with greater income certainty by enabling a direct deduction of welfare payments.
- Increasing the capital gains tax discount to 60 percent for affordable housing.
- Extending homelessness funding to the states by $375 million.
- Encouraging older Australians to free up housing stock by enabling downsizers over the age of 65 to make a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home.
- Applying an annual foreign investment levy of at least $5,000 on all future foreign investors who fail to either occupy or lease their property for at least six months each year.
Morrison said the measures were significant.
In Melbourne, for instance, land for a new suburb which could cater for 6,000 new homes will be unlocked just 10 kilometres from the CBD in Maribyrnong by releasing surplus Defence Land.
As for the measures regarding managed investment trusts and capital gains tax, Morrison said these would help to facilitate states and territories to implement inclusionary zoning requirements on new development sites.
Morrison said a comprehensive approach was needed in order to make housing more affordable.
“If a family or an individual has a roof over their head that they can rely on, then all of life’s other challenges become more manageable,” Morrison said.
“Whether you are saving to buy a home, spending a high proportion of income on your rent, waiting for subsidised housing, or you’re homeless, this is an important issue to you.”