A scheme designed to entice property investors to drop rents has been kicked down the road after an unlikely team up.
The coalition and the Greens joined forces to split the government's proposed laws off from buy now, pay later reform and send it to a Senate inquiry, which won't report until September 4.
The Build to Rent scheme would give investors extra tax incentives in a bid to build 150,000 extra rental homes.
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 argue the scheme won't making renting more affordable for many people. (Russell Freeman/AAP PHOTOS)
The Greens argued tax handouts wouldn't help as apartments would still be unaffordable, while the coalition said it would result in more foreign investors swooping in.
Three-quarters of market rent was still too expensive for many people, Greens housing spokesman Max Chandler-Mather said.
There was little evidence the handouts would then increase the affordability of rentals, he said.
"Tax handouts for property investors and developers helped create the housing crisis in the first place, so it is genuinely extraordinary that Labor is now proposing to give more tax handouts to property developers," Mr Chandler-Mather said.
Liberal senator Andrew Bragg was also critical of the scheme, pointing to department officials' testimony at a Senate hearing saying foreign investors that invested through trusts were the target market.
Liberal senator Andrew Bragg is worried the scheme targets foreign investment. (Mick Tsikas/AAP PHOTOS)
Investors from the US and UK would be targeted due to similar schemes operating in their countries.
The Australian dream shouldn't be about renting a house from a foreign fund manager, Senator Bragg said.
"Australians must not become serfs to foreign fund managers," he said.
Labor has criticised the opposition and Greens for standing in the way of more social and affordable housing.
"For the Liberals and the Greens, it's always about the politics, and never about the people," Housing Minister Julie Collins said.
"This legislation includes more affordable housing for renters."