Don't rush flawed trust tax increases into law.
The Property Council calls on the Parliament to send rushed discretionary trust tax changes to committee – giving industry the time it needs to appropriately scrutinise the Bill.
Recent polling undertaken by the Property Council and other housing-peak bodies has shown that family owned and mid-tier developers were planning to delay or cancel housing projects in the wake of ongoing uncertainty from trusts changes and other tax measures.
Property Council Executive Director of Capital Markets, Torie Brown said the government had ignored the legitimate concerns raised by industry during an expedited consultation process and is trying to rush through yet another damaging tax hike without understanding the impact their changes will have, particularly on housing supply.
"Industry was given almost no time to consider how these radical changes will affect their businesses. Despite the warnings from industry, the government had decided to push ahead and introduce this legislation anyway.
"Changes to trusts is incredibly complex - pulling one thread unravels another. The government announced these changes without considering the impacts they would have on small business and housing supply."
The Property Council calls on the Greens and the Coalition to ensure that this legislation is sent to a Senate committee for thorough review.
Many small to medium housing developers rely on discretionary trusts to build homes. They are already facing rapidly rising construction costs, financing constraints and skills shortages, while the housing market has been smashed by tax hikes and interest rate rises.
"If we are really concerned about housing supply, we need to rethink these changes."
Joint industry polling showed that more than 60 per cent of small and medium property developers expect the governments tax increases to affect project timing or viability, with 37 per cent of those businesses anticipating one or more projects to be cancelled entirely.
"The government has massively underestimated the damage these policies will cause to residential development because they fundamentally don't understand how business works.
"A Senate inquiry will help politicians understand how these changes will reduce housing supply in their electorates."
