Unlocking Supply of Family Homes Bill 2025

Senator BLYTH (South Australia) (10:38): I think it's fair to say that, under this Labor government, the dream that Australians have of owning their own home has never been further from reach. Australia has a serious housing supply problem, and younger Australians are increasingly struggling to find homes that meet their needs but, more importantly, fit within their budgets.

For many young Australians, getting into a family home now means moving kilometres away from where they grew up, which means moving away from the communities that they grew up in, their friends, their families and the lifestyle that they have grown accustomed to. There are older Australians who are living in homes that are larger than they need or no longer suited to their lifestyle or mobility needs.

That's why this bill matters. It's about making downsizing easier, not harder, while helping more family homes come back onto the market. When this bill was first introduced in November, national auction clearance rates were around 65 per cent and the RBA cash rate was at 3.6 per cent.

Now, the national clearance rates of auctions are around 55 per cent, the cash rate is 4.35 per cent and the ANZ is warning that property prices could fall by almost 15 per cent. That is the difference that 10 months and a terrible Labor budget has made to the Australian housing market. In that environment, the case for making it easier for older Australians to downsize and free up family homes has only become stronger.

This bill is simple, practical reform that helps address two problems at once: housing supply for younger Australians and retirement security for older Australians. It builds on the coalition's original downsizer contribution policy introduced back in 2017-18. The principle is straightforward: make it easier for older Australians to move into homes that better suit their needs while freeing up larger homes for young families looking to get into the market.

At a time when housing supply is under enormous pressure, we should be looking at every single practical way that we can get more existing homes moving through the market. The existing downsizer contribution policy already provides an incentive to people to make that move. Expanding it means that more Australians can access that incentive earlier, and it allows them greater flexibility.

When a larger home comes onto the market, it can provide an opportunity for a young family to enter the market or move into a home that better suits their growing family. This is all about making better use of the housing stock that we already have. So what does this bill do?

Well, this bill makes three straightforward changes to the existing downsizer contribution rules. It will lower the eligibility age from 55 to 50. It will extend the contribution window from 90 days to one year after settlement.

And it will increase the contribution limit from $300,000 to $500,000 per person. That means that a couple could potentially contribute up to $1 million from the sale of their family home. The existing requirement to have owned the home for at least 10 years remains.

Other existing eligibility requirements also remain in place. The contribution remains a non-concessional contribution and does not count towards the annual contribution caps. Why lower the age?

The current age threshold can discourage people from making appropriate housing decisions in their 50s simply because they are not yet eligible for the incentive. Downsizing decisions are highly personal and can happen well before the age of retirement. Let's be honest; under this Labor government, Australians are going to have to work longer and harder to be able to afford their retirement.

For example, when children have left the home, circumstances change or a larger property becomes more expensive or more difficult to maintain. Lowering the age to 50 gives Australians greater flexibility to make that decision when it is right for them rather than making them wait until they meet an arbitrary age threshold. Why the $500,000 limit?

The value of family homes has increased significantly since the existing $300,000 limit was established. A higher contribution limit better reflects the value of housing assets Australians have accumulated over decades. For a couple, the ability to contribute up to $1 million provides a meaningful incentive to consider downsizing while allowing more of the proceeds of the family home to be directed towards retirement savings.

The reform does not give people a tax deduction. It simply gives them greater flexibility to move the proceeds of an existing asset into their superannuation. Selling a family home and finding the right replacement property doesn't always happen within 90 days.

The current 90-day window can create unnecessary pressure on people to make a major housing decision in a very short timeframe. Extending the window to 12 months gives older Australians greater flexibility to sell first, find the right home and then decide whether they'd like to make a contribution to their super. This is particularly important in a tight housing market, where finding an appropriate, smaller or more accessible home can take time.

Importantly, this bill does not force anyone to make the decision to downsize. It does not interfere with the family home. It simply removes some of the financial and administrative barriers that can make downsizing less attractive.

Older Australians get greater choice and flexibility over how they use the proceeds of the sale of their home, and younger Australians get the potential benefit of more family-sized homes coming onto the market. Labor talks a big game on intergenerational fairness. It was the justification for their housing taxes after all.

If Labor really cares about intergenerational fairness, they should support this bill. This is an intergenerational housing measure. Younger Australians need more opportunities to access family-sized homes.

Older Australians deserve greater choice over where and how they live and how they want to manage their retirement. Helping an older couple move from a four-bedroom family home into one that better suits their needs can create an opportunity for another family to move into that larger home. This bill makes that transition easier.

It gives the older Australians more flexibility while helping more established homes to move back through the market. That is good for housing mobility, good for younger families trying to find a suitable home and good for older Australians who want to take control of the next stage of their lives. And unlike so much of Labor's housing agenda, this does not depend on another government fund, another bureaucracy or another promise that occurs years into the future.

These homes already exist. The bill simply makes it easier for them to come back onto the market. That is exactly the kind of practical reform we should be supporting when Australia is already facing a serious housing shortage.

The coalition believes homeownership is foundational to strong families, strong communities and a strong society. Young Australians should be able to work hard, save and aspire to own their own home. Older Australians should also have the freedom to make decisions about their housing and retirement that suit their circumstances.

This bill works on supporting the interests of both older and younger Australians. Labor has delivered a trifecta of failure on housing. They're delivering fewer homes and higher rents, and confidence in the housing market has been smashed.

Westpac mortgage applications have plunged 20 per cent since Labor's May budget, a clear warning that buyers and investors are losing confidence in the housing market. Labor's own budget forecast its tax changes would mean 35,000 fewer homes, and economists are warning weaker mortgage demand will flow through to fewer transactions, less construction and even tighter housing supply.

You cannot solve a housing crisis and shortage by taxing housing investment, smashing confidence and making it harder, not easier, to build new homes. Labor promised 1.2 million homes by 2029, but the government is struggling to deliver on that ambition. Labor has failed on housing supply, spending $80 billion to build 30,000 fewer homes a year than under the coalition.

Under Labor, Australia is building around 170,000 homes a year, compared with around 200,000 homes a year under the coalition. And let's not forget the migration numbers that they are bringing into Australia, which place further strain on the housing market. The Albanese government has made it harder and more expensive to build new homes.

There are higher taxes on tradies and thousands of pages of new regulations, and a great, big, new government bureaucracy has turned the Australian dream of homeownership into a nightmare. We want Australia to be the best place in the world to live and raise a family. The coalition will make it cheaper and easier to build new homes by axing all of Labor's taxes on families and tradies.

We'll slash red and green tape, and we will get rid of Labor's failed housing bureaucracy. We'll establish a $5 billion housing infrastructure fund to help unlock 400,000 new homes, including in regional Australia, by funding essential last-mile infrastructure such as water, sewerage, power and access roads. We'll reserve the first home buyers five per cent deposit scheme for Australian citizens only, and we'll simplify the National Construction Code while preserving core safety standards.

This will cut the cost of building a new home by up to $70,000. We will abolish Labor's ineffective Housing Australia Future Fund, as well as their build-to-rent tax breaks for multinationals. We'll axe Labor's housing taxes, increasing the number of homes by 35,000.

Australia needs more homes, and we need to make better use of the homes that we already have. We should be removing barriers to people making housing decisions to suit their circumstances, not putting more barriers in the way. This bill gives older Australians more choice, strengthens retirement security and can help free up larger homes for younger families.

It is voluntary, it's targeted and it's practical. Of course, it won't solve Australia's housing crisis all on its own, but that is no excuse for Labor to oppose a measure that can make a real difference today. I support this bill.