News National Labor targets foreign investors, self-managed super with housing affordability plan

Labor targets foreign investors, self-managed super with housing affordability plan

Bill Shorten
Labor has released its housing plan ahead of schedule Photo: Getty
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Tougher penalties on foreign investors and reining in self-managed super funds are part of a new package unveiled by federal Labor to help ease the housing affordability crisis.

Labor detailed its new housing affordability package on Friday as it ramps up pressure on the Turnbull government ahead of the the May budget.

In addition to plans to reform negative gearing and capital gains tax concessions, the opposition says it would limit direct borrowing from self-managed super funds and increase foreign investor fees and penalties.

It would also work with state governments to impose a uniform vacant property tax across all major cities, a policy recently announced by the Victorian government.

Announcing the plan on Friday, Opposition Leader Bill Shorten said the government was not taking the housing affordability crisis seriously.

“The Liberal Party is putting housing affordability for young Australians in the too-hard basket,” he said.

“You cannot be fair dinkum about helping first home buyers get their first home unless you are willing to reform negative gearing, unless you are willing to do something about foreign buyer, unless you are willing to do something about the self-managed superannuation fund borrowers in the future.”

Mr Shorten stressed that Labor’s policies were not retrospective.

“Anyone who has invested under current SMSF rules or under current negative gearing are not affected,” he told reporters on Friday. 

Other measures included in the package include re-establishing  the National Housing Supply Council, a $90 million boost to homelessness support, while a Labor government would have a Minister for Housing.

It says it will establish a bond aggregator to help create more affordable housing – a policy the government has also indicated it supports.

Labor claims its policy will lead to the construction of more than 55,000 new homes over three years.

Direct borrowing from superannuation funds will be banned, in a bid to “cool an overheated housing market partly driven by wealthy Self-Managed Super Funds”.

Foreign investors would also be slugged, with Labor to double the application fee for residential real estate.

Shadow Treasurer Chris Bowen said the opposition’s housing affordability package would give first home buyers a better chance to enter the market.

“What our policies are designed to do is take the heat out of the housing market,” he said.

“So that when a first home buyer or owner-occupier turns up here or anywhere else in Australia at an auction, they are not bidding with one hand tied behind their back as the investors have negative gearing in their hand.”

But Assistant Treasurer Michael Sukkar said Labor’s housing plan, including its policies around negative gearing, would actually make it harder for first home buyers to enter the market.

“We also know Labor’s tax will make it more difficult for renters,” he said.

“If you increase taxes on investment into the residential housing market, you ultimately push up rents.”

In a media release, Mr Sukkar said: “Labor’s attack on Self-Managed Super Funds shows they are once again reaching for the chainsaw.”

“Labor just don’t understand the need for finely tuned measures on housing,” he said.

He also accused the opposition of “plagiarising” the Turnbull government’s policy work on a social housing bond aggregator.

The Turnbull government has ruled out changes to negative gearing in the May budget, which is expected to include a suite of measures to address housing affordability.

Last week, government MPs openly disagreed about the idea of allowing young Australians to dip into their superannuation for a house deposit.

On Friday, Finance Minister Mathias Cormann, a known opponent of the policy, appeared to rule it out.

“That’s not something we think would address the problem,” Senator Cormann told Sky News.

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