The Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No.1) Bill 2017 is being read the second time at the House of Representatives.
This bill allows private investors to qualify for an additional 10 per cent CGT discount if the property is provided as an affordable rental. This incentive will be implemented retrospectively from 1 January 2018.
At the moment, private investors are eligible for a 50 per cent discount to CGT after they hold an asset for at least 12 months. The additional 10 per cent CGT discount will be available to private investors who offer affordable housing to an individual tenant through a community housing provider. Other vehicles such as managed investment trusts can also hold the asset. To receive this additional discount, the private investor must offer the affordable property for at least three years once this policy change is implemented. The property must be managed by a registered community housing provider. This measure aims to encourage increased investment in affordable rental housing and forms part of the government’s housing affordability package announced in the 2017-18 budget.
Shelter WA welcomes the fact that the Federal Government is recognising the importance of investing in affordable housing to meet the housing needs of Australians building on the strengths of the Community Housing sector in providing affordable housing and support services. Housing tax treatment needs to be fairer More broadly, Shelter WA believes that changes to CGT discounts need to be made so that the tax treatment of housing is fairer and more equitable to enable the increase of social and affordable housing. It needs to facilitate investment in social and affordable housing through the community housing sector and encourage institutional investment.
Whilst a welcome initiative, Shelter WA is concerned that this is not going to tackle housing unaffordability for the most marginalized housing consumers. A more systemic and strategic approach, brought together under a national housing strategy is needed aligning policy and program initiatives across government, industry and the community sector is needed to ensure everybody with a place that they can call home.