Australian Budget Taxes Projected to Cut Housing Supply by 35,000 Homes

New taxes on shares, ETFs, cryptocurrency, and small-business income introduced in the 2024 Australian federal budget are projected to reduce new home construction by 35,000 units ^[1].

This projection suggests a conflict between the government's revenue goals and its housing targets. By increasing the cost of investment and reducing profitability for small-business developers, the tax changes may stifle the very supply needed to address the national housing crisis.

Dave Sharma, Shadow Assistant Minister for Citizenship, said the government's own modelling in the budget papers predicts the loss of these 35,000 homes ^[1]. Sharma said the measures are a "straight tax grab" that fails to support the housing market.

"How is increased tax on shares, on ETFs, on crypto, on small businesses, how does that create more houses?" Sharma said.

The Shadow Assistant Minister said the tax burden falls heavily on those who provide the capital necessary for development. He said the impact on small businesses is particularly severe, stating, "It doesn’t help them at all, and this is one of the cruellest parts."

According to the projections, the increased cost of investment in property and the reduced profit margins for developers act as a deterrent to new projects ^[1]. This creates a gap in the housing pipeline that could exacerbate existing shortages in the Australian property market.

The government's modelling indicates that the intersection of these specific tax increases—targeting diverse investment vehicles and business income—directly correlates to the projected drop in housing starts ^[1].