Build-to-rent incentive plan hits opposition roadblock

The coalition and Greens have blocked government legislation for a build to rent program, demanding provisions on tying rent to a person's income and allocating all homes built under the scheme.

The Build to Rent scheme would give investors extra tax incentives in a bid to build 150,000 extra rental homes amid a chronic shortage.

At least 10 per cent will need to become affordable rentals, meaning they will have to be rented out at less than 75 per cent of market value.

The Greens and opposition teamed up to send it to a Senate inquiry, which won't report until September 4.

Three-quarters of market rent was still too expensive for many people, Greens housing spokesman Max Chandler-Mather said.

All of the properties built under the scheme should be affordable rentals, not just 10 per cent, and rent increases on the apartments should be limited to two per cent, Mr Chandler-Mather said.

He also called for proposed minimum leasing terms be increased from three to five years and rent to be set at either 25 per cent of gross income or 70 per cent of market value, whichever is lower.

A 7.5 per cent energy efficiency standard should also be put in place, he said.

A single Sydney nurse would still need to spend half their income on rent discounted by 25 per cent to afford a two-bedroom in inner Sydney, he said.

"Labor's bill to rent proposal will see property developers get tax handouts to build apartments almost no one will be able to afford," he told reporters in Canberra on Thursday.

Liberal senator Andrew Bragg was also critical of the scheme, pointing to department officials' testimony at a Senate hearing saying foreigners that invested through trusts were the target market.

Investors from the US and UK would be targeted due to similar schemes operating in their countries.

"Australians must not become serfs to foreign fund managers," Senator Bragg said.

But the Property Council of Australia has urged for the bill be passed to boost housing stock.

"We desperately need more homes in Australia, across the full spectrum - from social and affordable housing, to market rental housing and to homes for people to purchase," chief executive Mike Zorbas said.

"With rental vacancies at historic lows across the country, delaying legislation that can boost the number of rental properties will work against our need for greater supply and affordability."

Labor has criticised the opposition and Greens for standing in the way of more social and affordable housing.

"If the Greens political party really cared about building for homes, they would have voted for the tax break that would have built tens of thousands of homes for people to rent," Treasurer Jim Chalmers told parliament.

"If they really cared about rental pressures, they would vote with the Labor government to build more properties."