Andrew Wallace (Fisher, Liberal Party) Share this | Hansard source

In the past six months we've seen this program, the $2.7 billion HomeBuilder program, result in 133,000 applications to build new homes since the middle of 2020. In total, in the 2020-21 financial year, this will produce a record 137,170 detached housing starts, which is an increase of 34.2 per cent on the previous year. This is almost 17 per cent higher than the peak of the previous boom in 2018, according to the Housing Industry Association's national outlook. The effects will pour over into the next year, with the HIA anticipating that in 2021-22 it will be the third-strongest year on record, with another 121,000 starts. This is in an environment where those members opposite said, 'HomeBuilder will never work.' And yet it is proving to be one of the most successful stimulus packages that the building and construction industry in this country has ever seen.

This government is investing billions of dollars in increasing the accessibility of housing in Australia. However, there is more that we can do to support the availability of homes through regulation, and this bill will help to achieve just that. More than 75 per cent of older Australians want to stay in their own home. However, as they get older, larger houses can often become too much for an older person to look after. Meanwhile, many young families are unable to afford a house which is large enough for their needs. For society at large, the available housing stock could be increased if more three-, four-, or five-bedroom family homes currently being occupied by one older person or a couple could be made available to members of their wider families. In response to this situation, many families around Australia are now entering into what are known as granny flat arrangements. These typically involve an older parent transferring the ownership of their home to their adult child in exchange for the promise of care, support and housing as the parent ages. These arrangements can be a great outcome for everyone. They give older Australians the opportunity to continue living in their own homes but with more help to maintain and look after them. They allow young families to get access to larger homes, which can properly accommodate them at a time when rents are inaccessible to many.

For all of us, it makes more efficient use of larger properties and ensures that there is more housing stock available to others. When equitable and carefully codified, these arrangements can benefit everyone, and encouraging more such well-formed agreements will make an important difference to housing in this country. However, at present, these arrangements can have serious unintended consequences for older people. Most are not formalised in writing, meaning that the rights of the older Australian can be entirely at the mercy of the goodwill and the circumstances of their child's family.

No-one or very few would enter into one of these arrangements expecting a relationship breakdown, the death of an adult or child, or a bankruptcy proceeding. More often than not, such eventualities are not included explicitly in any agreement. However, these things do happen, and when they do the older person who has given up their home can be left without any enforceable rights; worse, they can be left homeless themselves. Such issues are made more prevalent by the fact that few of these arrangements are written down and formally executed.

I understand that there are not many of us who want to enter into formal contracts with our loved ones. Most of us would like to believe that our family ties would be strong enough to see us through any challenge. There's an old lawyer joke, Deputy Speaker Andrews, which you would remember: 'Where there's a will there's a family member.' Nothing could be truer than that old adage. Others are concerned that in making a formal arrangement to transfer property they may become liable for capital gains tax. However, when issues of property, debt and taxation are involved, family ties can be powerless to stop the terrible consequences for too many older Australians. In other cases, sadly, children or their partners do not act with the benevolence that we would all hope for and expect, and the result can be ongoing elder abuse in the form of neglect or, very sadly, financial exploitation.

We need to encourage more of these arrangements to be formalised, in writing, to prevent these negative outcomes. At the same time, we need to encourage more of them to be entered into, to maximise the benefits that they can bring for all of us. The bill before us does just that, by amending the capital gains tax regulations to provide a targeted exemption for formalised granny flat arrangements. The bill will provide that no capital gains tax event will arise on entering into, varying or terminating a granny flat arrangement if it is properly formalised under the bill. By providing a specific exemption, the bill will ensure that taxpayers know that there will be no capital gains tax consequences for them if they transfer property in this way. There is, in short, no motivation to attempt to avoid a tax through an informal arrangement, if the arrangement is exempt from the tax, and every reason to ensure that your arrangement is properly and equitably formalised if it will grant a major tax benefit.

This capital gains tax exemption will not only encourage more of these granny flat arrangements to be entered into but also incentivise construction of the additional accommodation within properties that are so often part of these arrangements. Parties to formalised arrangements will be able to build a granny flat, annex or extension where the older person will live, increase the value of their property, increase the housing stock available to all Australians, and not incur capital gains tax on that investment. This will be a significant driver for many families to take that step and realise those mutual benefits.

When as society we face a problem as serious and complex as homelessness we need to use every tool at our disposal to make a difference. It is commendable that Australians have taken it into their own hands to innovate and create arrangements that can deliver such benefits—important benefits—to older Australians, young families and those in need of housing alike. We need to encourage these kinds of practical grassroots solutions. We need to make sure that they are safe and fair for everyone. This omnibus bill will bring positive change across our economy. However, schedule 3, in particular, will make a big difference to the challenge of housing and homelessness for older Australians.

One element I haven't raised this afternoon is the importance of local government in this space. Housing and homelessness is principally the responsibility of the states and territories. The Commonwealth government also has a role to play, but very often local government is left out of the equation. This is a part of the equation where local governments can play a very, very important role. Many local governments do not allow a secondary dwelling to be built on a property. In instances where we have housing shortages and increased costs for many young people, this bill will provide a sensible measure to deal with this issue but it will really only work if local governments get on board the bus, if you'll pardon the pun. Local governments need to be able to step into the breach here. Many local governments—and my local government on the Sunshine Coast is an example—seem to have a philosophical problem with secondary housing, or granny flats or whatever you like to call them. Local governments across Australia can play a very, very important role in dealing with housing and homelessness but they need to step up to the plate. It's not going to cost them any money. They will receive funding through applications for approvals. There is no reason why local governments should not be a part of and have a seat at the table in dealing with housing and homelessness. I call upon local governments to get on board and work with the federal government on this very point. I commend this bill to the House.

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