House debates

Wednesday, 27 November 2019


Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019, Foreign Acquisitions and Takeovers Fees Imposition Amendment (Near-new Dwelling Interests) Bill 2019; Second Reading

12:58 pm

Photo of Michael SukkarMichael Sukkar (Deakin, Liberal Party, Assistant Treasurer) Share this | Hansard source

In summing up, I want to thank those who have contributed to the debate. The government recognises the importance of additional investment to meet Australians' needs for more affordable housing, as well as making it easier for Australians to get into the housing market. It's important to the wellbeing of all Australians and access to secure and affordable housing no doubt improves social and economic participation, and education and health outcomes, which is why it is such a focus of the Morrison government.

These bills represent an important step in ensuring that Australians have access to secure and affordable housing, and encouraging investment into affordable rental housing, while continuing to strengthen the integrity of Australia's tax system. It follows the Treasury Laws Amendment (Housing Tax Integrity) Act and the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No. 1) Act, which give effect to a number of measures that support housing affordability for all Australians, which were announced in the 2017-18 budget.

Schedule 1 to the main bill delivers on the government's commitment to implement tighter rules for foreign residents owning Australian property. This schedule introduces reforms to strengthen the capital gains tax rules for foreign residents. Foreign residents will be denied access to the main residence CGT exemption with grandfathering arrangements, importantly, until 30 June 2020. However, those who have been a foreign resident for six years or less may be able to continue to access the main residence exemption if certain life events, as defined, occur during that period of foreign residency. The principal asset test will also be modified to address an integrity issue with the CGT rules for indirect interests in Australian real property. These two reforms were announced alongside an expansion of the foreign residence CGT withholding regime which has already been legislated and came into effect on 1 July 2017.

Schedule 2 to the bill, meanwhile, allows resident investors in qualifying affordable renting housing to obtain a CGT discount of up to 60 per cent. The changes will provide up to an additional 10 per cent CGT discount for investments in affordable housing, thereby encouraging increased investment in affordable rental housing.

Schedule 3 to the bill is a technical amendment which supports changes announced in the 2017-18 budget that streamlined the foreign investment framework. This amendment introduces a reconciliation payment for dwellings sold by a developer under the near-new dwelling exemption certificate that was introduced by regulation on 24 June 2017. This ensures that, where a near-new dwelling is sold by a developer to a foreign person, the developer provides a reconciliation payment in respect of that sale. It ensures integrity in that system.

Thank you again to those who have contributed to this debate and participated in the public consultation with the government on these measures. I therefore commend the bill to the House. The government will not be supporting the opposition's amendment.


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