The Real Estate Institute of Australia (REIA) has voiced strong concerns over the proposed Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026, highlighting potential adverse effects on Australia’s housing supply. In a recent opening statement to the Senate Economics Legislation Committee, REIA President Jacob Caine emphasised the critical issue at hand: Australia’s housing crisis is primarily a supply crisis.

“The REIA is the national peak body and voice for the real estate profession in this country,” Caine stated, setting the stage for a detailed critique of the proposed tax reforms. According to Caine, reshaping tax settings in a way that reduces rental investment could exacerbate the housing crisis, adding uncertainty and potentially slowing the delivery of new homes.

Caine underscored the gravity of the situation, noting that “more than 7 million Australians live in rental homes.” He pointed out that the government’s modelling suggests the reforms will transition only 75,000 renters into home ownership over a decade. “The other 99 will be left in a rental market with fewer properties and higher rents,” he warned.

The REIA’s concerns are backed by independent modelling commissioned in collaboration with Master Builders Australia, the Housing Industry Association, and the Property Council. This modelling predicts a significant negative impact on the housing market. “On the tax changes alone, the modelling estimates 14,032 fewer dwelling starts over the first four years,” Caine revealed. He added that construction output could decrease by $1.9 billion, GDP could drop by $1.374 billion, and construction employment might be reduced by more than 2,000 full-time equivalent workers by 2029–30.

Even with the government’s $2 billion housing support program factored in, the outlook remains bleak. The combined impact is expected to result in 8,742 fewer dwelling starts over four years, higher rents, a lower GDP, and a reduction in construction employment by 3,854 FTE workers. “These reforms do not build more homes. They disrupt and damage investor behaviour in a market already facing acute supply shortages,” Caine asserted.

While the REIA acknowledges the policy intent behind the reforms—to encourage investment into new supply—it argues that the practical effect is likely to be the opposite. “REIA’s position is not that Australia’s housing tax system should never be reviewed,” Caine clarified. “But it should be reviewed holistically, across federal, state and local settings, and with one test above all others: will this increase housing supply?”

Caine’s comments reflect a broader concern within the real estate industry that the proposed tax reforms may not achieve their intended goals. Instead, they could potentially deter investors and exacerbate the current housing supply crisis. “On that test, we do not believe these bills, in their current form, receive a pass mark,” Caine concluded.

The REIA’s stance highlights the complexities of addressing Australia’s housing crisis through tax reform. As the Senate Economics Legislation Committee continues to deliberate on the proposed bills, the real estate industry will be watching closely to see how policymakers balance the need for increased housing supply with the potential impacts on the rental market and broader economy.