Independent senators Jacqui Lambie and David Pocock have called for a crackdown on foreign ownership of real estate in a bid to ease Australia’s housing crisis.
Senators from both banks are pressing the Labor government to implement changes to negative gearing and reduce tax concessions on investment properties.
They said reducing those grants could generate up to $60 billion over a decade that could be spent on social and affordable housing.
The senators said they asked the Parliamentary Budget Office to examine five possible changes to the capital tax and negative gearing concessions.
Jacqui Lambie (pictured) and David Pocock (pictured) are lobbying the Labor government to implement changes to negative gearing and reduce investment property tax concessions.
Senators say the planned reforms would protect homeowners’ existing investments, while incentivizing the supply of new homes.
“We need to start making sensible changes,” Senator Pocock told the ABC.
“The main parties don’t want to talk about tax reform in a real estate crisis, but we have to do it.”
Senators say their planned reforms include limiting capital gains tax discounts to future investments while allowing existing owners to maintain any existing agreements.
They say this would protect current owners, while aiming to leave existing homes for owner-occupiers and let investors put their money into new builds.
“If you are negatively adapting a house, you can protect what is already there before we make any changes,” Senator Lambie said.
Senator Pocock added: “In the future, you [would only get the] Capital gains tax discount if you are investing in new offering.
They also called for an end to foreign ownership, fearing foreign buyers snapping up properties, often from parents for their children while they study in Australia.
“The other thing we may be talking about that we’re not talking about is foreign ownership,” Senator Lambie said.
‘Let’s stop foreign landlords buying up our housing system. “This is the kind of action we need to take.”
International students can buy existing properties in Australia, but must sell them six months after graduating and leaving the country.
Foreigners can only buy new properties and need permission from the Foreign Investment Review Board, while permanent residents are free to buy any property they want.
Labor lost the 2019 election promising to scrap negative tax breaks and halve the 50 per cent capital gains tax discount for property investors, with Prime Minister Anthony Albanese ditching the policies of his predecessor Bill Shorten in opposition.
They also called for an end to foreign ownership, fearing foreign buyers snapping up properties, often from parents for their children while they study in Australia.
Jacqui Lambie believes that the planned reforms are not a magic solution to solve the housing crisis, but are necessary to reduce the current imbalance.
Senator Lambie believes the planned reforms will not immediately solve the housing crisis, but are necessary to reduce the current imbalance between supply and demand that is driving up prices.
‘Are we giving so many taxes to people, tax relief to people with these houses? It’s getting past the point of ridiculous,” she stated.
Senator Pocock is confident Australians will support the planned reforms.
“There is quite a bit of polling and research showing that the majority of Australians really support changes to our property system,” he said.
Critics of his proposals say that reducing incentives for people to buy investment homes would reduce the supply of homes available for rent, further increasing competition in the rental market and therefore driving up prices.
These policies would also benefit home seekers, but would hurt existing homeowners who rely on an endless influx of foreign buyers to drive up prices and allow them to make a profit when they sell.
Senators are now putting pressure on the government to implement the reforms.
“They said they were going to provide thousands of houses in 10 or 15 years, but that is not enough,” Senator Lambie added.
‘This is not going to stop the real estate crisis. Show some courage and start making more moves on the game board.’