A bid to end property hoarding and temper house prices could throw thousands of aspiring homeowners’ dreams into peril as the Albanese government sheds crucial support.

Labor’s Help to Buy housing scheme will support 40,000 eligible buyers with an equity contribution of up to 40 per cent for new properties, and 30 per cent for existing dwellings.

The government wants to have the scheme up and running as soon as possible, but the Senate has referred the legislation to an inquiry which will report back in April.

The Greens claim Help to Buy would push up house prices while failing to help 99.8 per cent of renters and first home buyers.

“We have a property investor prime minister who is refusing to phase out billions of dollars in tax concessions for property investors that are denying millions of renters the chance of every buying a home,” Greens senator Max Chandler-Mather said on Monday.

The minor party wants property investor tax breaks significantly scaled back in exchange for its support for a plan it describes as Labor’s “housing lottery”.

The Greens also want changes to negative gearing and capital gains, with the revenue to be set aside for public housing.

Treasurer Jim Chalmers has repeatedly ruled out changes to property investment tax breaks.

Former Liberal NSW premier Dominic Perrottet has also called on governments to consider issues such as negative gearing.

“Over 90 per cent of all property investor purchases are on existing dwellings,” Senator Chandler-Mather said.

“That means they’re not actually adding to supply. What they’re doing is hoarding homes that could have been used by a first home buyer.”

Without support from the coalition, the Labor government needs the backing of the Greens and at least two crossbenchers for legislation to clear the upper house.

Housing Minister Julie Collins said the Greens and coalition needed to stop standing in the way of initiatives seeking to address the crisis.

“Help to Buy will provide a pathway to home ownership for people who have been locked out,” she said.

Master Builders Australia chief executive Denita Wawn warned changes to negative gearing would worsen housing supply.

“With the current downturn in new building approvals and investments in new housing, why we would take a sledgehammer to investors including Mums and Dads beggars’ belief,” she said.

Negative gearing allows investors to claim deductions on losses, while the capital gains tax discount halves the amount of excise paid by people who sell assets that have been owned for 12 months or more.

Tess Ikonomou and Kat Wong
(Australian Associated Press)