Latest news with #McKellInstitute
Canberra Times
6 days ago
- Business
- Canberra Times
Calls for consumption tax to be off the roundtable menu
Changing the capital gains tax discount has been backed in by the Greens and Labor-aligned think tank the McKell Institute, which argued it could be tweaked to encourage new housing supply and make it easier for Australians to own their own home.
News.com.au
21-07-2025
- Business
- News.com.au
‘Too long': Call to flip major tax breaks for property owners
Thousands of new houses could be built in the next five years with tweaks to tax rules that Labor has resisted 'for too long', experts say. Increasing tax breaks for investors in new properties is needed for Australia to meet its 'ambitious' 1.2 million home target by 2030 according to a new research paper by The McKell Institute. Four tweaks to capital gains tax – including an increase to the 50 per cent discount for new units but a reduction on discounts for detached dwellings – are being put forward as a 'circuit breaker'. The paper will be submitted to the federal productivity roundtable forum, which Treasurer Jim Chalmers is promoting as a way to build consensus on long-term economic reform. 'Labor has resisted change to the CGT discount for too long,' McKell chief executive Edward Cavanough said. 'The CGT tax discount is neither good nor evil, but it should be better calibrated to actually achieve our social aims.' 'Instead of encouraging property investors to bid up the price of existing housing stock we should be encouraging them to contribute to the construction of new dwellings.' Capital gains tax is paid when you buy an asset and then later sell it for a profit; the profit you make is taxed as income. The capital gains tax discount kicks in when, if you own an investment property for 12 months and then sell it, you only pay tax on half the profit you made. The richest 10 per cent of Australians reap the benefits of more than half the capital gains tax discounts, government data shows. Sale of the home you own and live in is exempt from capital gains tax. The plan projects up to 130,000 extra new homes could be built by 2030. 'A key problem with our existing tax settings on property is they orient too much investment toward established dwellings at the cost of new supply,' Professor Holden said. 'There is nothing wrong with the commonly held desire of everyday investors to secure their future by investing in the housing market. 'But this desire should be harnessed to achieve our national objectives on housing supply.' The federal government has set a lofty goal of 1.2 million new houses being built by 2030 that would require 220,000 new dwellings per year. About 160,000 new homes are built each year. The monthly new home target has been met just once since the target was set in early 2023, and even the federal Treasury has suggested the target will not be hit under the current policy settings. In tune with the McKell research, a group of rank-and-file Labor members has also thrown their voice behind a proposal to curb the tax discounts, with Labor for Housing saying a reduction in the discounts would help build more houses. Mr Chalmers has billed the roundtable meetings as a chance to set in motion aspirational reform. In June, Mr Chalmers said changes to capital gains tax was not something the government was 'looking at right now' but acknowledged there was appetite. 'I think it is really important we don't narrow that, limit that, those ideas people put forward. We've had a view about that in the past. I do suspect people will raise it, and we'll listen respectfully when they do,' he said.
Sydney Morning Herald
20-07-2025
- Business
- Sydney Morning Herald
The tax change that could allow thousands of new homes, ease rental pressure
Prime Minister Anthony Albanese is under pressure to overhaul capital gains tax, delivering bigger tax incentives to investors who build new units amid warnings that without change, the government will fail to hit its 1.2 million new home target. Research for the Labor-aligned McKell Institute argues that an increase in the current 50 per cent discount on CGT for new units but a reduction for investors who purchase an existing detached house would encourage construction of additional 130,000 homes before 2030. NSW could get an extra 40,000 homes while Victoria stands to gain up to 33,600 additional properties in a move that would be a stark departure from Labor's 2019 election policy to heavily curtail CGT concessions. Albanese and Treasurer Jim Chalmers are heading a three-day economic roundtable next month, when tax reform will be one of the key discussion points. Labor went to the 2019 election with a policy to halve the capital gains tax concession, which had been introduced by the Howard government in the late 1990s in a move that economists say contributed to a surge in house prices, as part of a proposal to also restrict negative gearing to new properties. But the McKell research shows a larger concession on new builds combined with reduced incentives for investors to buy existing detached homes would both lift the number of new properties while putting downward pressure on rents. Report co-author Richard Holden, a respected independent economist, said the 1.2 million target would not be met under current tax settings. 'A key problem with our existing tax settings on property is they orient too much investment toward established dwellings at the cost of new supply,' he said. 'There is nothing wrong with the commonly held desire of everyday investors to secure their future by investing in the housing market. But this desire should be harnessed to achieve our national objectives on housing supply.'
The Age
20-07-2025
- Business
- The Age
The tax change that could allow thousands of new homes, ease rental pressure
Prime Minister Anthony Albanese is under pressure to overhaul capital gains tax, delivering bigger tax incentives to investors who build new units amid warnings that without change, the government will fail to hit its 1.2 million new home target. Research for the Labor-aligned McKell Institute argues that an increase in the current 50 per cent discount on CGT for new units but a reduction for investors who purchase an existing detached house would encourage construction of additional 130,000 homes before 2030. NSW could get an extra 40,000 homes while Victoria stands to gain up to 33,600 additional properties in a move that would be a stark departure from Labor's 2019 election policy to heavily curtail CGT concessions. Albanese and Treasurer Jim Chalmers are heading a three-day economic roundtable next month, when tax reform will be one of the key discussion points. Labor went to the 2019 election with a policy to halve the capital gains tax concession, which had been introduced by the Howard government in the late 1990s in a move that economists say contributed to a surge in house prices, as part of a proposal to also restrict negative gearing to new properties. But the McKell research shows a larger concession on new builds combined with reduced incentives for investors to buy existing detached homes would both lift the number of new properties while putting downward pressure on rents. Report co-author Richard Holden, a respected independent economist, said the 1.2 million target would not be met under current tax settings. 'A key problem with our existing tax settings on property is they orient too much investment toward established dwellings at the cost of new supply,' he said. 'There is nothing wrong with the commonly held desire of everyday investors to secure their future by investing in the housing market. But this desire should be harnessed to achieve our national objectives on housing supply.'
The Advertiser
16-07-2025
- Business
- The Advertiser
Dollar dazzler designs no silver bullet for housing woe
Slick housing designs costing less than an ice cream are being deployed to get more homes built, but detractors have dubbed the promotion a "thirst trap". The "pattern book" of low-rise designs including terraces, townhouses and manor houses could be ticked off for construction in 10 days. The designs, whipped up by internationally renowned architects as part of a NSW government competition, will be available for $1 for the first six months. They then rise to $1000, still well below the going rate. The government estimates the designs would typically cost upwards of $20,000 if commissioned from an architect. Premier Chris Minns has repeatedly blamed a sluggish planning system for poor progress on nationally agreed housing targets. NSW has produced six houses per 1000 people each year compared with Victoria's eight and Queensland's 10, he said. "Ask anybody for the last 20 years in NSW how frustrating it has been to get approval for a family home, they'll all say the same thing, it is impossible," Mr Minns told reporters on Wednesday. "We are falling behind when it comes to new development completions, alongside the fact that we are one of the most expensive cities on earth." The NSW scheme will have wider availability and lower up-front fees than a Victorian strategy which was limited to a single council area, Mr Minns said. But acting Opposition Leader Damien Tudehope said the pattern book plans were governed by "glossy brochures". "(It's) almost like a thirst trap," he told reporters. "We have scantily clad people as part of the brochure." Mr Tudehope questioned the claimed 10-day approval but said councils should tick off all types of housing faster. The state remains behind its target to build 377,000 new homes by July 2029 under a national housing agreement. The premier acknowledged in an address to the McKell Institute on Wednesday getting 75,000 homes off the ground each year remains a tall order. But he didn't mind the challenge. "It puts pressure on the government, and therefore pressure on local councils and pressure on developers and the Reserve Bank and everything to really start thinking," Mr Minns said. The design plans coincide with the latest figures from the Australian Bureau of Statistics showing an increase in construction starts in the first three months of 2025. More than 47,000 new home builds commenced in that time, a 17 per cent increase on the same period in 2024. University of NSW architecture professor Philip Oldfield lauded the "high quality architectural designs" as a step towards expediting approvals. But he warns governments need to be more ambitious and holistic to overcome "structural and endemic" issues stemming from tax policies and complex regulations. "Everyone's looking for a silver bullet rather than actually planning for the future," he told AAP. "The cost to build a home and the cost of the land is quite high ... so it's short-sighted to expect the private development model to solve all our problems." The NSW government has allocated billions in recent budgets to build and refurbish social housing as well as helping private developers meet pre-sales targets and secure finance to build apartment buildings. Building designers backed the release of the pattern book but called for more formal involvement in future iterations, saying architects design fewer than five per cent of residences in NSW. "(Building designers) deliver the vast bulk of housing in NSW ... their input is essential," Building Designers Association of Australia chief executive Chris Knierim said. Slick housing designs costing less than an ice cream are being deployed to get more homes built, but detractors have dubbed the promotion a "thirst trap". The "pattern book" of low-rise designs including terraces, townhouses and manor houses could be ticked off for construction in 10 days. The designs, whipped up by internationally renowned architects as part of a NSW government competition, will be available for $1 for the first six months. They then rise to $1000, still well below the going rate. The government estimates the designs would typically cost upwards of $20,000 if commissioned from an architect. Premier Chris Minns has repeatedly blamed a sluggish planning system for poor progress on nationally agreed housing targets. NSW has produced six houses per 1000 people each year compared with Victoria's eight and Queensland's 10, he said. "Ask anybody for the last 20 years in NSW how frustrating it has been to get approval for a family home, they'll all say the same thing, it is impossible," Mr Minns told reporters on Wednesday. "We are falling behind when it comes to new development completions, alongside the fact that we are one of the most expensive cities on earth." The NSW scheme will have wider availability and lower up-front fees than a Victorian strategy which was limited to a single council area, Mr Minns said. But acting Opposition Leader Damien Tudehope said the pattern book plans were governed by "glossy brochures". "(It's) almost like a thirst trap," he told reporters. "We have scantily clad people as part of the brochure." Mr Tudehope questioned the claimed 10-day approval but said councils should tick off all types of housing faster. The state remains behind its target to build 377,000 new homes by July 2029 under a national housing agreement. The premier acknowledged in an address to the McKell Institute on Wednesday getting 75,000 homes off the ground each year remains a tall order. But he didn't mind the challenge. "It puts pressure on the government, and therefore pressure on local councils and pressure on developers and the Reserve Bank and everything to really start thinking," Mr Minns said. The design plans coincide with the latest figures from the Australian Bureau of Statistics showing an increase in construction starts in the first three months of 2025. More than 47,000 new home builds commenced in that time, a 17 per cent increase on the same period in 2024. University of NSW architecture professor Philip Oldfield lauded the "high quality architectural designs" as a step towards expediting approvals. But he warns governments need to be more ambitious and holistic to overcome "structural and endemic" issues stemming from tax policies and complex regulations. "Everyone's looking for a silver bullet rather than actually planning for the future," he told AAP. "The cost to build a home and the cost of the land is quite high ... so it's short-sighted to expect the private development model to solve all our problems." The NSW government has allocated billions in recent budgets to build and refurbish social housing as well as helping private developers meet pre-sales targets and secure finance to build apartment buildings. Building designers backed the release of the pattern book but called for more formal involvement in future iterations, saying architects design fewer than five per cent of residences in NSW. "(Building designers) deliver the vast bulk of housing in NSW ... their input is essential," Building Designers Association of Australia chief executive Chris Knierim said. Slick housing designs costing less than an ice cream are being deployed to get more homes built, but detractors have dubbed the promotion a "thirst trap". The "pattern book" of low-rise designs including terraces, townhouses and manor houses could be ticked off for construction in 10 days. The designs, whipped up by internationally renowned architects as part of a NSW government competition, will be available for $1 for the first six months. They then rise to $1000, still well below the going rate. The government estimates the designs would typically cost upwards of $20,000 if commissioned from an architect. Premier Chris Minns has repeatedly blamed a sluggish planning system for poor progress on nationally agreed housing targets. NSW has produced six houses per 1000 people each year compared with Victoria's eight and Queensland's 10, he said. "Ask anybody for the last 20 years in NSW how frustrating it has been to get approval for a family home, they'll all say the same thing, it is impossible," Mr Minns told reporters on Wednesday. "We are falling behind when it comes to new development completions, alongside the fact that we are one of the most expensive cities on earth." The NSW scheme will have wider availability and lower up-front fees than a Victorian strategy which was limited to a single council area, Mr Minns said. But acting Opposition Leader Damien Tudehope said the pattern book plans were governed by "glossy brochures". "(It's) almost like a thirst trap," he told reporters. "We have scantily clad people as part of the brochure." Mr Tudehope questioned the claimed 10-day approval but said councils should tick off all types of housing faster. The state remains behind its target to build 377,000 new homes by July 2029 under a national housing agreement. The premier acknowledged in an address to the McKell Institute on Wednesday getting 75,000 homes off the ground each year remains a tall order. But he didn't mind the challenge. "It puts pressure on the government, and therefore pressure on local councils and pressure on developers and the Reserve Bank and everything to really start thinking," Mr Minns said. The design plans coincide with the latest figures from the Australian Bureau of Statistics showing an increase in construction starts in the first three months of 2025. More than 47,000 new home builds commenced in that time, a 17 per cent increase on the same period in 2024. University of NSW architecture professor Philip Oldfield lauded the "high quality architectural designs" as a step towards expediting approvals. But he warns governments need to be more ambitious and holistic to overcome "structural and endemic" issues stemming from tax policies and complex regulations. "Everyone's looking for a silver bullet rather than actually planning for the future," he told AAP. "The cost to build a home and the cost of the land is quite high ... so it's short-sighted to expect the private development model to solve all our problems." The NSW government has allocated billions in recent budgets to build and refurbish social housing as well as helping private developers meet pre-sales targets and secure finance to build apartment buildings. Building designers backed the release of the pattern book but called for more formal involvement in future iterations, saying architects design fewer than five per cent of residences in NSW. "(Building designers) deliver the vast bulk of housing in NSW ... their input is essential," Building Designers Association of Australia chief executive Chris Knierim said. Slick housing designs costing less than an ice cream are being deployed to get more homes built, but detractors have dubbed the promotion a "thirst trap". The "pattern book" of low-rise designs including terraces, townhouses and manor houses could be ticked off for construction in 10 days. The designs, whipped up by internationally renowned architects as part of a NSW government competition, will be available for $1 for the first six months. They then rise to $1000, still well below the going rate. The government estimates the designs would typically cost upwards of $20,000 if commissioned from an architect. Premier Chris Minns has repeatedly blamed a sluggish planning system for poor progress on nationally agreed housing targets. NSW has produced six houses per 1000 people each year compared with Victoria's eight and Queensland's 10, he said. "Ask anybody for the last 20 years in NSW how frustrating it has been to get approval for a family home, they'll all say the same thing, it is impossible," Mr Minns told reporters on Wednesday. "We are falling behind when it comes to new development completions, alongside the fact that we are one of the most expensive cities on earth." The NSW scheme will have wider availability and lower up-front fees than a Victorian strategy which was limited to a single council area, Mr Minns said. But acting Opposition Leader Damien Tudehope said the pattern book plans were governed by "glossy brochures". "(It's) almost like a thirst trap," he told reporters. "We have scantily clad people as part of the brochure." Mr Tudehope questioned the claimed 10-day approval but said councils should tick off all types of housing faster. The state remains behind its target to build 377,000 new homes by July 2029 under a national housing agreement. The premier acknowledged in an address to the McKell Institute on Wednesday getting 75,000 homes off the ground each year remains a tall order. But he didn't mind the challenge. "It puts pressure on the government, and therefore pressure on local councils and pressure on developers and the Reserve Bank and everything to really start thinking," Mr Minns said. The design plans coincide with the latest figures from the Australian Bureau of Statistics showing an increase in construction starts in the first three months of 2025. More than 47,000 new home builds commenced in that time, a 17 per cent increase on the same period in 2024. University of NSW architecture professor Philip Oldfield lauded the "high quality architectural designs" as a step towards expediting approvals. But he warns governments need to be more ambitious and holistic to overcome "structural and endemic" issues stemming from tax policies and complex regulations. "Everyone's looking for a silver bullet rather than actually planning for the future," he told AAP. "The cost to build a home and the cost of the land is quite high ... so it's short-sighted to expect the private development model to solve all our problems." The NSW government has allocated billions in recent budgets to build and refurbish social housing as well as helping private developers meet pre-sales targets and secure finance to build apartment buildings. Building designers backed the release of the pattern book but called for more formal involvement in future iterations, saying architects design fewer than five per cent of residences in NSW. "(Building designers) deliver the vast bulk of housing in NSW ... their input is essential," Building Designers Association of Australia chief executive Chris Knierim said.
