Industry body warns draft legislation will undermine housing supply targets and deter investment across key housing types
The Property Council of Australia has urged the federal government to conduct a second round of consultation on proposed capital gains tax (CGT) and negative gearing legislation, arguing the current draft contains significant flaws.
In a submission to Treasury, the trade body contends the draft laws will discourage investment in housing types critical to the National Cabinet's target of 1.2 million new homes by 2029.
The body is seeking ministerial relief powers and a two-year statutory review as conditions for proceeding.
The Mortgage & Finance Association of Australia has also lodged a submission on the second tranche of the reforms, calling for early certainty, clear Australian Taxation Office guidance and practical worked examples ahead of the 1 July 2027 commencement date.
"Confusion in tax law is projected onto the real world: delayed projects, stalled financing and new homes that never reach the market," said Mike Zorbas (pictured right), chief executive of the Property Council of Australia.
"Australia is already miles behind on housing supply. If the government gets these settings wrong, the result is less investment in supply and more pressure on buyers and renters."
Zorbas said the draft legislation was currently pointing in the wrong direction on supply, and that the exposure drafts failed to provide certainty for build-to-rent assets across their development lifecycle or adequately account for the diversity of Australia's housing system.
He argued that all housing types — including master planned communities, build-to-rent apartments, retirement villages and student accommodation — should be covered under the reforms. The government, Zorbas added, needed targeted powers to address unintended consequences quickly, rather than relying on successive rounds of legislation while projects remained stalled.
He also called for a statutory review after two years, describing it as the minimum acceptable standard when investment settings were being rewritten during a national housing crisis.
"Treasury should implement industry's feedback and consult again, fix the blind spots and make sure every part of the housing continuum is backed in, not taxed out," Zorbas said.
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