Liberal Leader Angus Taylor says his plan to tie migration levels to housing construction would cut immigration by 70 per cent.
Under the proposal, net overseas migration would be capped according to the number of homes built each year.
Taylor told Sky News the policy would result in immigration being cut by at least 70 per cent.
'Right now, we know that it would be at least a 70 per cent reduction from Labor's peak immigration numbers,' Taylor said.
'It would be well below 200,000. I'm not going to declare that number until we know how many houses are being built, and we'll know that in the next little while.'
Based on the peak net migration figure of around 500,000 during the 2022–23 financial year, such a reduction would bring migration levels down to about 150,000 people a year.
'Labor has set its immigration targets without regard for the housing that is being constructed in this country, the housing, the services, and the infrastructure,' Mr Taylor said.
'This must change, and what we're proposing here is each year the housing minister would say we've built this many houses, and so the immigration number, the net overseas migration number, can be X.'
Liberal Leader Angus Taylor says his plan to tie migration levels to housing construction would cut immigration by 70 per cent
Australia is on track to receive more overseas arrivals than previously forecast after the government quietly increased its migration estimates in the Budget.
The revised outlook adds an extra 35,000 people next financial year and another 20,000 the year after.
Following the revisions, net overseas migration is now projected to reach a cumulative 1.2 million people between 2025 and 2030.
The Coalition is also seeking to restrict welfare access for non-citizens as part of its wider policy package.
Under the plan, access to 17 welfare payments and benefits would be available only to Australian citizens.
At present, newly-arrived residents can obtain these benefits with either no wait or waits of up to four years.
Taylor said the changes are aimed at making Australian citizenship 'matter' and ensuring benefits are reserved for citizens.
'Australian citizenship must matter, it must be important, it must have benefits that come with it,’ he said.
Migration figures under the Coalition would fall 70 per cent from Labor's peak in 2023 (file)
The policy, which would be grandfathered, means current non-citizens already accessing welfare, including Centrelink, the NDIS and other payments, would not be affected.