Building industry blasts tax change as damning housing data released

The building industry is joining the wave of anger at the Australian Taxation Office’s incoming ban on credit card tax payments, saying it will only slow the growth of Australia’s beleaguered housing supply.

From December 1, the ATO will refuse to accept credit card payments, citing the $200 million cost of surcharges which then must be passed on to the taxpayer.

But multiple business groups have decried the decision, saying it will just add to the burdens faced by small and medium operators.

The Housing Industry Association put in its two cents this morning, saying the new policy could ultimately slow the rate of construction in Australia.

HIA chief executive industry and policy Simon Croft said the decision removed a legitimate payment option used by some businesses to help manage cash flow.

“Residential builders and small businesses more broadly continue to navigate a challenging operating environment, with increased construction costs, wages, insurance, finance and regulatory costs all significantly higher than they were just a few years ago,” he said.

He said managing cash flow was “critical” for the residential building industry, where businesses were often balancing multiple payments.

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“While the ATO’s decision does not change the amount of tax owed, it removes one of the tools some businesses use to manage the timing of payments and maintain cash flow,” Croft said.

“Small and medium-sized builders construct the majority of Australia’s new homes.

“At a time when governments are looking to increase housing supply, every effort should be made to support the businesses responsible for delivering those homes, not impose further costs and complexities on their business.”

The warning comes after new ABS building data this week showed Australia was almost 95,000 homes behind the 1.2 million new homes target of the National Housing Accord for the first two years, based on new home commencements in that time.

Seasonally adjusted ABS data showed completions rose 5.8 per cent in the quarter to June 2026, mostly driven by apartments, townhouses, and terraces.

Detached home completions only lifted 1.4 per cent.

“Australia still has a long way to go if we’re serious about meeting our housing targets,” Property Council of Australia group executive policy and advocacy Matthew Kandelaars said.

“The housing challenge isn’t about whether the numbers move up or down in a single quarter. It’s whether we’re improving over a sustained period and meeting our Housing Accord targets of 1.2 million homes.”

He said Australia would not meet that target based on its current trajectory.

“Housing construction is competing for workers with major infrastructure projects, the energy transition and a rapidly expanding data centre sector,” Kandelaars said.

“You cannot increase housing supply while simultaneously making investment harder and stretching the workforce needed to build it.” 

Dr Kevin You of the conservative-leaning Institute of Public Affairs said even the overall increase in dwellings wasn’t a major win, pointing out that on the current data, the construction of detached dwellings had actually gone backward.

“Governments have responded to the housing crisis by increasingly focusing on the types of higher-density homes that Australians do not actually aspire to live in, and which are not conducive to starting and building a family,” he said.

“While the overall housing completion number was up in the 2026 financial year, this was entirely due to new apartments and other higher-density units being completed.

“The number of new standalone houses actually declined compared to the previous financial year.”