And in more detail...

Investors in housing don’t want new housing — whether affordable or otherwise — built. A higher demand for properties from a growing population, combined with a static supply, drives up prices. That’s why homes that cost half a million ten years ago can be worth eight to ten times that today. And the scarcity of properties also gives investors a fatter rental return — two bites at the ol’ cherry. This selfish gravy train has wrecked housing affordability and needs to stop.

Re-engineering the capital gains tax concession/negative gearing rules

There is an elegant solution. End negative gearing and capital gains tax entitlements on existing homes, but allow these entitlements on new properties. This would encourage investment in new housing stock while discouraging investors from competing with owner-occupiers in the purchase of existing properties. An immediate effect of this change would be the stabilising of prices on the majority of properties going under the hammer. And investors could still make money from housing by getting into the construction of new rental housing 

The Good Party would “grandfather” the existing rules governing negative gearing and capital gains tax concessions, modifying them to encourage the construction of new homes for the rental market and reduce housing price pressure.

The dark side of the housing Ponzi scheme

At the last official count, 116,427[1] of our fellow citizens indicated that they were homeless — sleeping in homeless shelters, sleeping rough, sleeping in their vehicles, or on the couches of friends and family. Some are grandparents, some are children, some are single mothers, and some are mentally disabled. Many of these people find themselves in this situation because they simply can’t afford to put a roof over their heads.

Homelessness, or staring down the barrel of it, is a frightening fact of life for far too many of us. And this is one of the world's wealthiest OECD nations. Every Australian must have access to affordable housing. We can start to make that happen by changing the rules.

 When house prices rise, as they have done across Australia for most of the last 30 years, the property's value increases even if it falls into disrepair. As a result, much of Australia's domestic wealth, the wealth of Australians, is generated by rising property values, which induce more investment in properties, boost house prices, and the land tax revenue collected by state governments. And so the housing "Ponzi scheme" continues

Increasing the nation's housing stock

To ease housing pressure, more affordable homes must be built. Supply is key, and the market has proved it won’t deliver. The Labor government has announced a number of initiatives. Key among them is the Regional First Home Buyer Scheme, offering a 15% loan guarantee, and the $10 billion Housing Future Fund to support 30,000 social and affordable homes.

The Good Party welcomes these efforts after years of neglect but notes key details are missing. For instance, Labor promises 10,000 affordable homes for frontline workers — but where are these homes to be built? Many nurses, police, and EMTs still can’t afford to live near their jobs, especially in major cities.

The Good Party proposes a home loan scheme for frontline workers that could be budget-neutral. States would waive stamp duty, and the federal government would offer interest-only loans covering the full property cost. These loans would be treated as assets, not adding to net debt, and repayments would offset the government’s interest costs.

Funding 100% mortgages for frontline workers

The Good Party proposes a home loan scheme for frontline workers that could be budget-neutral. States would waive stamp duty, and the federal government would offer interest-only loans covering the full property cost. These loans would be treated as assets, not adding to net debt, and repayments would offset the government’s interest costs.

Eligible workers—those employed for at least two years—could purchase a home near their job, helping to alleviate staff shortages in sectors such as nursing. Normal credit checks would apply, with loan caps tied to median local house prices. If a worker left their job, they’d have time to refinance. Upon selling, they’d keep all capital gains.

In a downturn, the government would act like banks—holding the loan until the market recovers, trusting that most homeowners won’t walk away from their property.

Making the investment in affordable housing stock viable for institutional investors

The federal government needs to push states to reform land tax so that super funds can be attracted to housing investment. Currently, tax is charged on the total value of all the individual properties owned, penalising investors with large property holdings.

If super funds could invest without heavy tax penalties (a single tax on a block of units, for example, rather than taxing those individual units), they’d be more likely to invest in housing, offer longer leases, ensure better maintenance, and enhance their reputation as a housing provider.

We think too much about land and not enough about space

Land may be limited, especially in Sydney, but space isn't — if we think laterally. One major opportunity is the airspace above railway lines, which spans hundreds of kilometres. Cities like Tokyo and New York already use this space for housing; we should too.

State governments could release these air rights to super funds and developers, allowing a mix of affordable, social, and owner-occupied housing. Half the units could be sold to individuals, with the rest retained by institutions, assuming land tax settings are adjusted.

Land may be limited, especially in Sydney, but space isn't — if we think laterally. One major opportunity is the airspace above railway lines, which spans hundreds of kilometres. Cities like Tokyo and New York already use this space for housing; we should too.

The five-year rental lease

In Australia, 2.9 million households out of a total housing stock of 9.8 million dwellings are renters[2]. That's 31% of Australian households, a significant number. Governments have worked hard to encourage us to own our homes, but they’ve largely overlooked those who don’t. Because of this preference, almost anyone who rents will tell you they feel exposed. Very little is in place to protect renters from high rental increases, poor or inadequate maintenance, the threat of eviction, and other issues. With interest rates on the rise, there's anecdotal evidence that renters are given two letters from their landlord — one is a rent increase, and the other is an eviction notice. The renter is given no choice other than to pick one.

The Good Party aims to firmly place renters' rights on the national housing affordability agenda. One option would be to promote five-year leases. What could be in it for the landlord offering such a long-term lease?

• No land tax on that property
• The tenant pays for all repairs and maintenance
• Annual rent increases tied to whichever is the lesser, the CPI or WPI (National Wage Price Index)
• Guaranteed uninterrupted income on the property
• A bond of two-month’s rent

What’s the advantage for a renter on a five-year lease? Security. The property owner would only be able to break the lease, subject to negotiation with the tenant. The tenant, however, would be permitted to end the rental agreement with, say, three months’ notice. A penalty would be necessary to discourage this behaviour. For example, the bond would go to the homeowner.

Another advantage would be predictable rent increases, which could be offset against any agreed improvements to the property undertaken by the renter.

As for the bond, it’s about time the states paid a fair interest on this money, which they can often hold onto for years. Queensland, Victoria, Western Australia, NT, ACT and Tasmania, for example, pay no interest at all on this money. In the remaining states, the interest paid is substantially below market rates.

The Good Party aims to firmly place renters' rights on the national housing affordability agenda. One option would be to promote five-year leases

Adding weight to a landlord's obligations

State departments, such as NSW Fair Trading, outline landlords’ “obligations” and “responsibilities,” but without legal protections for tenants, there is little pressure to keep rental properties fit for habitation. Some homes start in decent condition but become unlivable after years of neglect.

There must be consequences for landlords who delay or refuse essential repairs, such as reimbursing a portion of the rent or removing the property from the rental market until it is made habitable.

Too often, landlords end leases on flimsy grounds rather than fix issues, knowing desperate renters will still pay more despite poor conditions. Enough. Legal accountability is needed.

While housing laws are state-based, the rental crisis is a national issue. The Good Party would call for a national cabinet meeting to establish a national outcome.

There must be consequences for landlords who delay or refuse essential repairs, such as reimbursing a portion of rent or removing the property from the rental market until made habitable

A National Rental Ombudsman

What is clear is that there needs to be a National Rental Ombudsman who can adjudicate the issues between tenants and landlords. With the pressure on rental accommodation availability at breaking point and tempers flaring, the appointment of an ombudsman at the national level is well past due. 

The Vacant Residential Property Tax 

The 2021 Census revealed that 10% of all dwellings in Australia—over a million homes—are unoccupied, while the national rental vacancy rate is just 1%. A clear solution to the housing shortage may be to tax properties left vacant for more than six months a year, thereby encouraging owners to rent or sell them.

While no new tax is popular, the Good Party supports a national Vacant Residential Property Tax (VRPT), with revenue directed toward homelessness initiatives.[3]

Together with legal obligations for landlords, a Rental Ombudsman, and the establishment of a VRPT, renters would be far less exposed to the uncertainties of the market.

[1] 2016 Australian Census

[2] 2016 Australian Census

[3] The Victorian state government introduced a limited version of this – the Vacant Residential Property Tax (REIV) for certain residential suburbs of Melbourne