Latest news with #housingtarget
News.com.au
a day ago
- 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.
ABC News
14-07-2025
- Business
- ABC News
Housing, superannuation and tax reform targeted in leaked Treasury advice
Treasury has accidentally released details of advice given to the government which includes doubts about Labor's housing target and advice to pursue tax reform. Treasurer Jim Chalmers speaks to 7.30's Sarah Ferguson.
ABC News
14-07-2025
- Business
- ABC News
Jim Chalmers 'relaxed' about accidental release of Treasury advice
Jim Chalmers says he is "pretty relaxed" after his department accidentally released details of the advice he received after the election, which includes doubts about Labor's housing target and advice to pursue tax reform. The treasurer confirmed the headings, which were given to the ABC in response to a Freedom of Information request, were "sent in error" by a Treasury official but said the contents were consistent with his own public comments. The headings revealed the department's view that the ambition to build 1.2 million homes in five years would fail and that tax hikes and spending cuts were both needed if the budget was to be made sustainable. "The priorities which are being reported today are … the sorts of things that I have mentioned before," he told reporters on Monday. "We have already made it really clear that we will need to do more to meet our housing targets … We have made it clear that we need to build on the progress we have made in repairing the budget so that we can make the budget even more sustainable." Mr Chalmers said the government had not been considering further changes to superannuation tax on top of its proposal to increase the tax on earnings, including unrealised gains, which the Treasury advice appeared to suggest he could "build on". He also maintained the housing target could be met, and that the heading suggesting that it "will not be met" was only a "partial" reflection of Treasury's view even as he accepted the target was not on track. "The point that Treasury is making, the point that I understand and accept, is that the government will need to do better and do more to meet that target," he said. "Under current trajectories, we would fall short, but that doesn't mean that between now and over the course of the next four years we can't work … to build more homes," he said, adding Housing Minister Clare O'Neil was "working out what we need to do differently and better" to meet the target. "I think it would be strange if a government like ours saw the obvious challenges in housing and decided anything other than to try to be ambitious … I find it strange that people want to limit our ambition." The treasurer said it would be "strange if Treasury's wasn't" modelling worst-case scenarios for the global economy, after document headings revealed the department had studied the consequences of a potential US dollar crash and loss of the US Federal Reserve's independence. "I welcome and I encourage the Treasury to think about best- and worst-case scenarios … It gives you a better chance to work through them if they eventuate," he said. "I'm grateful for the work that they do because it helps me think through various scenarios, even if we think that the chances of that happening are remote." The opposition has seized on the advice, which Shadow Treasurer Ted O'Brien said was evidence of the government "hiding the truth". "Treasury is telling Labor what the Coalition has been saying all along — they have a spending problem, they lack fiscal discipline, and they are preparing to slug Australians with higher taxes," he said in a statement. "Whether it's housing, tax or the budget, Labor is failing to come clean." The briefing was prepared during the election period, when caretaker conventions apply, limiting the government's ability to direct the public service. Known as an "incoming government brief", alternative versions are prepared for Labor and the Coalition, with only the winner's brief ever given, and with no oversight from either party about its contents, which reflect the department's view of their platforms. The release of the losing brief under Freedom of Information laws has been precluded by previous court cases. The winning brief is often released upon request in heavily redacted form, as was the case in this instance. Greens housing spokesperson Barbara Pocock said the Treasury advice on the housing target represented "the cornerstone of [Labor's] election commitment crumbling before the first sitting of the new parliament". "Labor's hot air around housing is proving to be more bluster than content … Even if they could build 1.2 million new homes, under the present tax arrangements they are likely to go to wealthy property investors who can leverage their tax advantages to push first home buyers out of the market," she said. Budget economist Chris Richardson told the ABC it was "magnificent" to gain an insight into Treasury's "truth-telling" to government, but that "none of this is a surprise". "But equally none of it is as familiar to Australians as it should be," he said on social media. "Far better that these issues are raised and discussed. If we're to get a better nation, we need a better conversation."
