The Greens secured additional amendments to restrict borrowing by self-managed super funds (SMSFs) for residential property investment and remove ministerial discretion over future eligibility settings in return for supporting the Bills.
Property Council Chief Executive Mike Zorbas said while the new housing carve-out remains in the legislation, the overall package risks weakening investment sentiment and supply at the worst time. He said the impact is compounded by broader Budget tax measures, including proposed changes to discretionary trusts and other investment structures relied on by small and medium developers, family businesses and private capital.
"Across the property sector, the national tax burden is $130 billion and growing.
"Add in rising costs of labour, materials and capital and you have the makings of a perfect storm.
"These tax hikes mean less investment in the living sector, commercial and industrial projects our growing cities need at a critical time.
"By the government's own numbers, that means tens of thousands fewer new homes at a time when we need to add to supply. Up to 40 per cent of the cost of a new home is already made up of taxes and government charges.
"When push comes to shove, Australia's housing challenge is a supply challenge and these changes, added to the upcoming trust changes will deliver fewer homes, not more."
Independent modelling commissioned by the Property Council, Master Builders Australia and the Real Estate Institute of Australia shows the combined package will reduce dwelling starts by more than 8,700 homes over four years, while placing upward pressure on rents.
The Property Council will continue to engage with government on the changes.
