Labor gazumps Coalition with housing affordability plan

The Turnbull Government has indicated housing affordability will be a focus of the Budget next month.

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But Labor is on the front foot, with Bill Shorten revealing how he would tackle the problem if he wins the next election.

“We have taxation and superannuation laws which favour property speculators over first-home buyers. There is a crisis in housing affordability in Australia. Now we are 45 kilometres from the centre of Sydney, and these well-made houses behind us – house and land packages – are going for $700,000 and $800,000 each. The great Australian dream of owning your first home is rapidly becoming the great Australian nightmare.”

Labor is sticking to its original plan to reduce negative gearing tax concessions and increase tax on capital gains.

But it’s also announced a suite of extra measures, including more fees for overseas investors.

It also wants to ban self-managed super funds from borrowing money to discourage them from investing in property, which they say is over-heating the market.

But the Coalition’s Michael Sukkar says discouraging investment would slow down the construction of new houses.

“Anybody who has a job that is in any way related to the residental construction industry will be hurt, because again we know that if you increase the taxes on investment into residential property, there will be less investment. If there’s less investment, there’s less housing. And if there’s less housing, it’s worse for the entire market.”

The Coalition has remained tight-lipped about the details of its housing plan.

The idea of letting young home-buyers dip into their superannuation funds to pay for a deposit has been floated by some in the government, including Tony Abbott, but rejected by the prime minister.

The government has all but ruled out any change to negative gearing.

But Labor’s Chris Bowen says any serious housing affordability solution must include changes to tax.

“Any plan which doesn’t involve reform to negative gearing is a sham. Any reform that doesn’t involve reform to capital gains tax is a joke.”

Labor would also put pressure on the other states to follow Victoria in implementing a tax on empty properties.

It would also create a so-called bond aggregator, which would make low-interest government loans available to those building cheap housing.