Friday, 22 May 2026

In this Edition...

1. Fallout from Budget

2. Quote of the week

3. Quid dicit?

...and much, much more...

4. Energy Locals gives its support to development excellence
5. Grattan report: Get rid of prescriptive car parking requirements
6. Light rail to La Perouse?
7. Fast tracking fuel
8. Bondi Junction Masterplan
9. Hyegrove’s Grand opening – Retirement living at the Heart of Willoughby
10. Is the Land of the Long White Cloud a cautionary tale?
11. Middle East conflict undermining commercial property confidence
12. Planning near the planes:  New housing options approved near Nancy Bird Walton Airport
13 Council watch
14. Planning Portal update
15. How to make housing affordable?  The Georgists say by taxing property…
16. Members in the news

1. Fallout from Budget

By CEO Tom Forrest

How did the budget go bad so quickly?

I recall only two Federal Budgets that have gone down with the public as poorly as this one. The 1993 Keating / Dawkins Budget and the 2014 Abbott / Hockey / Cormann Budget.

Within five days, a Budget with a strong intergenerational narrative has turned bad.

The very people that the Budget was supposed to appeal to are burning it down with memes, humour and in some cases, vitriol and anger. The very cohort (young people) that this budget was supposed to help are tearing it apart.

So, what happened?

The pre-Budget leaks had tilled the soil for change.  The case was mounted for change to the Howard era concessions on negative gearing and capital gains tax.  Urban Taskforce was concerned about this, but focused our attention on preserving the CGT concession of 50% for newly built property as well as allowing the existing negative gearing arrangements for those new builds.  As long as those newly built properties were held by the original buyer, the status quo on those taxes would remain.

In a unanticipated change, the Budget also spread the tax changes to include a minimum tax of 30% on all payments to the beneficiaries of discretionary trusts. 

There is mass confusion over the taxation treatment of unit trusts and the interaction between those trusts and the company taxation arrangements.  It appears that unit trusts are exempt from the changes - but the messaging is, at best, poor.

All this has had the effect of stopping investment decions.  If a property financier were looking to create a tax effective capital stack to support new housing right now, they would not know where to start.  

The Details:

Negative gearing for all those that held a property as at 12 May, is “grandfathered” – that is – the current arrangement will apply until the property is sold.

The Capital Gains Tax changes will apply to all existing dwellings as at the date of the budget (12 May 2025) - be they new builds of otherwise - as at 1^st July, 2027.

For all those dwellings, the existing 50% concession on CGT will apply to gains made up until 1^stJuly, 2027.  The new CGT calculation methodology (which calculates the discount based on inflation), will apply to gains made after that date up until the sale of that dwelling. 

Investors in new builds purchased after 12 May 2025 will be able to choose the inflation discount methodology or the 50% concession for the life of their ownership of that dwelling.

The Budget papers themselves stated that these changes would result in 35,000 fewer new dwellings being constructed.  Not a great start for the "Housing Budget"!

This is apparently because those investing in a new-build (even with the maintained CGT and negative gearing provisions) would achieve a lower capital gain as investors will effectively be removed from the market when the house later goes up for sale and the original capital gain is realised.

All this is great news for property valuers (there had to be a winner somewhere).

A new base-line in the value of each “existing dwelling” will need to be established for every single investment property as at 1^st July 2027 (or you could choose to trust the ATO and its application of a capital gains apportionment formula).  

In other news, there is no change to the 60% CGT discount for investments in affordable housing.

So … what went wrong for Jim Chalmers?

Firstly, the Government appears to have completely under-estimated the political impact of broken promises.  The pre-election promises not to make any changes on negative gearing or capital gains tax were very clear. For a large cohort of Australian voters, their mistrust of Labor on tax promises is long-standing and has been re-ignited by this Budget. Let's consider Labor's record on this:

• The L-A-W Tax cuts, promised in the 1993, the second round of which was abandoned, was significant in John Howard’s 1996 election win
• Who will forget Julia Gillard definitive "there will be no carbon tax under the government I lead" commitment in 2010, the breaking of which saw the election of the Abbott Government in 2013.

In contrast, John Howard broke his promise not to introduce a GST, but he took his revised position to the 1998 election … and won! 

The Prime Minister’s abject incapacity to explain why the changes were being applied to start-ups and small businesses, even with a hand-picked social influencer interviewer, saw the credibility of this budget immediately fade.

Since that time, there has been a veritable “pile-on”.

But the real concern for Jim Chalmers and the Albanese Government is the quantum shift in mood. The Government has been branded anti-innovation.  Anti-cool!!

For those that see Labor as being akin to socialists, this Budget, and the painting of it as anti-innovation, anti-tech, anti-small business, anti-youth,  re-enforces their view.  Worse, the Government has been hopeless at explaining the Budget. 

The “fact sheets” are not consistent with the budget detail, which are in turn, inconsistent with the public statements of the PM and Treasurer, which are in turn, are inconsistent with each other!

The successful changes to the tax arrangements brought in by Paul Keating during the Hawke leadership were supported by comprehensive media campaigns.

Backed by Bill Kelty and the ACTU, along with Peter Walsh and Ralph Willis, every day and night the team, led by Keating, would do the rounds of John Laws, Andrew Olle, Paul Lyneham, Mike Willesee, Richard Carleton, Maximillian Walsh to name a few.  They knew their stuff and could communicate clear messages with clarity (and in Keating's case, with colour).

Albo was probably not paying much attention to the success of the many economy transforming changes brought in by Keating as he opposed many of them while leading the ALP's Left as Assistant Secretary and chief fire-brand.

Nonetheless, who would have thought that Angus Taylor would be the preferred Prime Minister so soon after he took the lead of the Coalition? 

To be fair, his call for an indexation of the tax brackets is simple, understandable and has broad appeal. Even Chris Minns has backed him on this (see below).  Taylor's position on immigration is weak, but it has done the job of giving a dog-whistle to the growing cohort of One Nation supporters.

The Urban Taskforce was happy to back the grandfathering of existing arrangements for negative gearing and CGT for new dwellings.  But the sales job on this budget has been really bad, and the taxation burden has either been badly miscalculated, or the economic commentariat has got it wrong. 

Either way, Anthony Albanese and Jim Chalmers have a lot of work to do to overcome this self-inflicted wound.

2. Quote of the week

You know things are bad when the Labor Premier of the largest state says that your tax scheme is hurting working families … Ouch!!!!

3. Quid dicit?¹

But it did leave us wondering: maybe he could take time out from brushing up on his dead language skills to tell us, ubi est infrastructura nostra quae habitationes efficit?⁷ 

1 “What is he saying?”
2 “preferred assembly”
3 “classical place”
4 “they sometimes comes up with something useful”
5 “we’re glad that we don’t have to do the research”
6 “dismal science”, AKA economics
7 “where is our housing-enabling infrastructure?”

Urban Taskforce – just trying to help 😉

4. Energy Locals gives its support to development excellence

The 2026 Development Excellence Awards are on their way, and Urban Taskforce wishes to express its appreciation of Energy Locals, which has agreed to be our principal sponsor this year. 

Energy Locals provides energy solutions to help improve project feasibility, with particular expertise in designing, funding, and delivering integrated energy solutions for apartment projects. 

Its support of our awards program is a sign of the importance of our industry and the value of recognising, rewarding, and celebrating the best development projects. 

We thank Energy Locals and we look forward to the Development Excellence Awards, which will be held on Thursday, 25 June, at 6.45pm, at the Sheraton Grand in Sydney. 

Tickets and tables are still available via our website.  

5. Grattan report: Get rid of prescriptive car parking requirements

In a growing city, not everyone needs a parking spot. 

That’s the finding of the Grattan Institute’s latest report Wasted space: Axe car parking rules to ease the housing crisis. 

Coming as no surprise for anyone in the development sector, the Institute argues that the rules requiring new housing developments to include off street parking are needlessly driving up the price of homes. 

For a typical development in Sydney, the cost could be as much as $70,000 per two-bedroom apartment. 

That’s a big cost in the middle of a housing supply crisis. 

The report suggests that all of this prime parking space is going to waste.  13% of floor space for apartments is dedicated to off-street parking, but as much as 40% of these spaces is sitting vacant each night. 

The reason?  Many households are no longer choosing to own a car. 

Mandated parking is creating a lot of empty space in residential basements, which reduces the number of apartments that might otherwise be built – maybe you could put a pool table there instead, but the lighting wouldn’t be that great …

The result is a mismatch between what parking is mandated, and what’s needed. The report shows that every year, Australia spends more than $1 billion building off-street carparking that residents don’t want. 

Amongst other things, the report calls for State and local governments to remove both maximum and minimum parking requirements for new housing developments. 

Urban Taskforce agrees.  We think that the market should decide. 

While some councils have removed mandatory minimums, they have also imposed restrictions on parking altogether.  This isn’t the solution. 

Developers should be able to provide parking if the market is calling for it but shouldn’t be forced to do so whether there is consumer demand or not. 

Mandatory car parking requirements simply add to the cost of new homes, impacting feasibility and reducing supply.  The removal of mandatory car parking, while retaining the flexibility to provide it if needed, will allow projects to be configured to suit the needs of new homebuyers. 

At a time when we are faced with sharp increases in the cost of construction, increases in taxes, fees, and charges, and declining housing affordability, mandating parking requirements is just another unnecessary mountain we are forced to climb.

As the report states: 

Letting Australian homebuyers choose the car-parking they need will make housing cheaper, get more homes built faster, and create more walkable, cleaner, and better-designed cities.

Commonsense planning to cater for the common person’s needs. 

6. Light rail to La Perouse?

There were calls this week for the Minns Government to fund an 8.5km extension to the light rail network to provide public transport all the way to La Perouse. 

Public transport is an essential service if areas are going to be opened up to more housing, although there are questions about whether the Eastern Suburbs light rail network would be able to provide the additional capacity to cater for residents at a further 13 stops from Kingsford to La Perouse. 

An extension to the Metro system might make more sense, given the inbuilt capacity for growth within that network and its vast, high-speed capacity. 

Urban Taskforce believes that the State Government should bite the bullet and investigate the best options to create housing supply opportunities around Sydney's south-east, as Labor announced in March 2008 when the Iemma Government launched its plans for the Metro network.  

Doing nothing is not an option. 

7. Fast tracking fuel

The Minns Government’s appetite for centralised planning decision-making continues apace with a pitch for “commercial scale” fuel storage projects – costing $100 million or more – to be fast-tracked. 

Responding to the ongoing global fuel pressures, the Investment Delivery Authority has been tasked with seeking expressions of interest for “import-independent” liquid fuel storage and production. 

Projects aimed at fuel resilience are welcome, if they can help to take pressure off supply costs. 

If only our housing infrastructure could be facilitated so quickly… 

8. Bondi Junction Masterplan

Will Nemish, the Liberal Party Mayor, has put solid meat on the bones of the Minns Government's vision for increased housing supply.  It is disappointing that the Labor Councillors have ignored the memo - they joined the Greens to oppose the new Masterplan. 

Council is to be praised for its bold vision to revitalise the precinct, with plans to deliver an extra 3,000 homes through mid-rise and high-rise development, with open space, nighttime activity strategies, and a commitment to improving the connectivity and appeal of the suburb. 

Council and the community will benefit directly from the proposal too, with plans to enhance the civic precinct around Ebley Street with new Council chambers, community facilities, and the expansion of Clementson Park. 

As with all plans, there are some areas where further discussion may be needed – the expected new housing yield is unlikely to cover the costs of the proposed enhancements, for example – but this may be covered by higher buildings or alternative funding mechanisms.  This sort of expenditure requires greater height than what is being proposed.  

The Masterplan is currently out for consultation, with submissions due by Wednesday, 24 June. 

9. Hyegrove’s Grand opening – Retirement living at the Heart of Willoughby

Hyegrove is the newest in luxury retirement living located right in the "Heart of Willoughby". 

Built on the site of the old Willoughby Legion Ex-services Club, which has been incorporated into the development as the new Club Willoughby, Hyegrove’s grand opening on Wednesday was attended by a range of supporters, including, Tim James, MP for Willoughby, Urban Taskforce CEO Tom Forrest, Rear Admiral Lee Goddard, Tanya Taylor, Mayor of Willoughby, the Abolakian family, and the Hycorp team. 

Representatives of the consultants and builders involved in the project were also in attendance, along with residents and returned service men and women, recognising the relationship with Club Willougby. 

A 2,000 sqm public memorial park commemorates our armed forces and will be the site of future Anzac Day commemorations. 

The project contains 111 luxury apartments, world class amenities and services (including on-site RNs to care for the residents), and 5,400 sqm of greenery.  It will be net zero by 2030 and has set new benchmarks for seniors living. 

The development is managed by HyeCare Home Care, which has prepared integrated care strategies to help residents to live independently while providing support when needed. 

The project gives retirees who want to stay in Willoughby, close to family and friends, the opportunity to do so without sacrificing amenity and care. 

The $400 million project has received high praise from NSW Building Commissioner James Sherrard and is a notable and welcome addition to Willoughby.  This is an outstanding example of height and density done very well.

The site could easily have accommodated an extra 3-4 storeys – but let’s hope this wonderful project can be seen as an exemplar of height resulting in an uplift for the entire community.  

10. Is the Land of the Long White Cloud a cautionary tale?

Amongst the fervent debates about the benefits and detriments of the Federal Budget came a warning note from our friends from over the Ditch. 

Dr Oliver Hartwich, Executive Director of the New Zealand Initiative, drew parallels between the negative gearing haircut delivered by Jim Chalmers and the economic experiments in his country. 

In 2021, the Ardern Government, having already restricted residential property losses to be offset only against rental income two years before, decided to remove deductibility altogether. 

In other words, mortgage interest was treated as if it didn’t exist – it couldn’t be offset against the rental income.  Rental returns of $40,000 would be taxed as $40,000, even if the investor had $30,000 in mortgage expenses. 

So, it was not a tax on profit, it was a tax on revenue. 

In addition, residential investment properties would draw the full marginal rate of taxation (39%) if sold within 10 years, with no adjustment for inflation. 

It was a double-whammy coming at a time that interest rates were rising and inflation was biting.  As a landlord you now had higher mortgages, couldn’t deduct against rental returns, and would be taxed to the hilt if you sold within 10 years. 

The result?  A drop in lending to investors, pressure on rental supply, and rapidly rising rents. 

It wasn’t entirely the fault of the tax changes – there were other pressures too – but they certainly played a significant role (sound familiar?). 

There was a silver lining.  Thanks to the medium-density upzoning policies in Auckland, which were extended across the country in 2021, more development consents were being granted than ever before, which helped take some pressure off escalating rents. 

When a new government was elected in 2023, the Ardern reforms were reversed, and the rental market started returning to normal. 

But New Zealand’s experience highlights something that Urban Taskforce has been saying for a very long time.  The only real solution to the housing crisis is to increase supply. 

Rather than lurching from one quick-fix policy solution after another, the Albanese Government needs to learn from those on the other side of the Tasman and recognise the importance of boosting housing supply. 

Sure, there may be some minor structural changes as a part of the proposed CGT and negative gearing taxation reform, but a comprehensive approach is needed to address the tax system in Australia. 

The Albanese Government's effort, while talking up intergenerational equity, feels a lot like a half day whiteboard session conducted by staffers on a Friday afternoon.  

11. Middle East conflict undermining commercial property confidence

As if the Budget uncertainty wasn’t enough, research reported in the RICS APAC Commercial Property Monitor has shown that sentiment in the commercial sector has plummeted. 

The Australian Commercial Property Sentiment Index has had a complete reversal, moving from +13 to -13, following the outbreak of war in the Persian Gulf. 

Researchers report a significant drop in investment inquiries, particularly from foreign investors, while credit conditions are showing considerable deterioration with a drop to -55. 

RICS warns that “a protracted conflict risks a meaningful deterioration in the outlook for Australian commercial property.” 

12. Planning near the planes:  New housing options approved near Nancy Bird Walton Airport

The current ban on secondary dwellings near the new Western Sydney International Airport has been lifted to boost affordable housing supply in the rapidly growing precinct. 

An announcement on Tuesday by the Minister for Western Sydney, Prue Car, and the Minister for Planning, Paul Scully, declared that landowners in areas with lower expected levels of aircraft noise would be able to increase density, capping new dwellings at 85 sqm and requiring measures such as double-glazed windows to reduce the impacts of noise from the curfew-free airport. 

Sites with higher expected levels of noise will still be restricted from further density. 

The new changes will apply to prescribed areas in Wollondilly, Camden, Fairfield, Liverpool, and Penrith LGA. 

13. Council watch

City of Sydney Council - Housing for All?

Avid readers of ULN will be aware of the City of Sydney’s Housing for All discussion paper (see Urban Living Network, 17 April 2026). 

The Urban Taskforce policy team has been locked in a windowless room to review the paper and has been impressed by the modesty of the Kent Street Crew, who asked themselves the question (in a report to the Council): 

“Where and how can we plan for more homes after we have done so much?” 

The paper – focused on the “basic human right” of affordable housing – asked why, despite using “every lever available to us”, more affordable and social housing options for the “diverse, cohesive, and economically successful global city” is not being delivered. 

The answer, according to Council’s analysis, is that market conditions – rising construction and labour costs, financial constraints, and higher interest rates – are hampering housing delivery “even with planning approvals”.  Part of this is fair comment.

But Council ignores the cumulative impact of high affordable housing levies, punitive conditions, and other restrictions council chooses to place on projects.  It must, Council reasons, be because: 

“Developers continue to hold off delivering supply, anticipating more favourable market conditions in the future.”

Hmmm … the only good news here is Council has once again seen a timeline blown out (think Cloud Arch) and has put back the exhibition period till 19 June, 2026.

14. Planning Portal update

More exciting news from the DPHI Planning portal team!!

A mere 22 days since our last update, that productivity busters at the Planning Portal team have more … well … news.

Commencing next Friday, 29 May, DPHI will be making a handful of changes, including: 

• removing the requirement for occupation certificate audit clearance when seeking an OC unless selected for an audit;
• an update hyperlink to the Division 5.1 (Part 5) Assessment guidelines;
• a new mandatory question: ‘Are there any mitigating circumstances that will prevent the indicative number of inspections for this development from being conducted?’ added to the ‘Review’ screen within the Risk Assessment module of the Major Projects Portal;
• updated ‘Risk Type’ options in the Major Projects Portal; and
• changes to the API. 

The full list of changes being made in the 29 May 2026 release can be found on the News and Announcements section of the Portal following the release, and scheduled training sessions have been set through to the end of the year. 

15. How to make housing affordable? The Georgists say by taxing property…

The comrades at Prosper Australia have found the solution for all of our housing affordability needs – tax development rights. 

The “economic research organisation founded in the Georgist tradition of political philosophy” has a mission to overcome the effects of “monopolistic nature of land and how it shapes our economy and society”. 

The goal is to ensure that everyone pays “a fair rent” for the use of land. 

“Fair” is a relatively subjective adjective… 

For those who aren’t well versed in the writings of American economist and social reformer Henry George, Georgism, otherwise knowns as Geoism, argues that the economic rent for land belongs equally to all members of society, and that individuals should only own value that they produce themselves. 

The philosophy also opposes the ownership of natural resources and "contrived privileges" such as intellectual property (“Property is theft”?). 

While we at Urban Taskforce are not opposed to a broad-based land tax per se, the suggestion that all land be taxed to create “Fair Housing Funds” may be a step too far. 

Prosper Australia’s report argues that the “failure to price development rights can be likened to an ‘unpriced privatisation of airspace’”. 

Maybe it hasn’t considered the taxes, fees, charges, and considerable restrictions placed by councils and government on the delivery of housing and the subsequent housing supply crisis it has created, nor the misery of homelessness and rental price rises that impact most on those which this group purports to advocate for – the poor!

16. Members in the news

*Please note these articles may be paywall protected

“The private Ingham Property Group plans to sell a 50 per cent stake in an under-construction Aldi distribution centre next to the new Western Sydney International Airport, which will be worth $1bn in its entirety.”  read more… 

The size of 15 soccer fields, the developer’s site next to the new airport at Badgerys Creek will create a template for large warehouses and will dominate the logistics precinct. 

Australian Business Network, 20 May

“Plans by Woolworths’s development arm Fabcot to develop a site in a southern Sydney bayside suburb into shoptop apartments are in the works, five years after plans were initially rejected.”  read more ...

141 apartments are being proposed in an “evolution of a previous application located in Ramsgate, which will also deliver a full-line supermarket.  The proposal is now sitting with DPHI. 

The Urban Developer, 21 May

“Stockland has won approval for its refreshed masterplan for the future Birtinya Central mixed-use town centre on Queensland’s Sunshine Coast.” 
read more …

The office site, which will soon be vacated by the airline, will be turned into a mixed-use neighbourhood precinct with 478 units plus retail, in two major towers. 

The Urban Developer, 18 May

“Stockland has filed plans for an apartment and retail precinct at the former Jetstar HQ, nearly two years after the developer acquired the prominent Collingwood site.”  read more …

2,600 homes are planned for the 28ha precinct, along with retail, commercial, entertainment, and community facilities. 

The Urban Developer, 15 May

“Sydney-based Coombes Property Group has made its first major move into Victoria, acquiring Midtown Melbourne at 246 Bourke Street for $154 million in the largest CBD retail transaction since 2024.”  read more … 

The 2,787 sqm mixed-use asset on the corner of Bourke and Swanston Streets comprises of 15,233 sqm of retail and office space, with extensive frontages to Bourke, Swanston and Little Bourke streets. 

The Urban Developer, 21 May

“Property funds manager Centuria has launched a new city office trust in a counter-cyclical play, and it will hold a 50 per cent stake in two Sydney World Square office buildings it is buying for about $450m.”  read more …

The funds manager is purchasing the blocks at 680 George Street and 50 Goulburn Street from Brookfield, marking a return to the CBD after 13 years.  

The Australian, 7 May

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