The federal government’s proposed laws to crack down on excessive tax deductions are not fit for purpose, industry figures and independent MPs warn.
Developers may have to form joint ventures and put in more equity to get projects off the ground if planned so-calledThe Property Council of Australia has already warned that the Treasury Laws Amendment Bill 2023 puts the development of 150,000 build-to-rent homes over the next decade at risk.Out of balance: Planned federal government laws to prevent tax evasion ignore realities of the highly leveraged property industry, critics warn.
Thinly capitalised entities rely on a high level of debt and relatively little equity. Reforms under the OECD and G20’s globalThe thin capitalisation provisions of the bill introduced to parliament in June limit tax deductions for loans, to prevent multinational companies from evading tax by charging excessively high interest rates on loans they make to Australian subsidiaries.
There is still time to resolve the problems. The bill, due to go back to the Senate for deliberation this week, was now only likely to come back before Parliament next year, a political source said on Tuesday.
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