Rental housing supply boost promised under tax tweaks

Tens of thousands of extra rental properties will be added to the housing stock under altered tax settings that have passed parliament.

The changes, which cleared the Senate on Thursday, pave the way for more build-to-rent housing, a model involving developers and financiers holding onto larger-scale housing developments to rent homes out long term.

In Australia, most housing developments are built with the intention to sell each dwelling.

Housing Minister Clare O'Neil said build-to-rent was no "silver bullet" solution to the housing crisis but was expected to produce 80,000 new rental homes over 10 years.

"I'm confident that this is a really important part of the answer to our housing problems in this country, not perfect, because nothing in life ever is but a good step forward for us," she told reporters in Canberra on Thursday.

For build-to-rent operators to be granted concessions, they will need to offer five-year minimum leases and no-cause evictions will not be allowed.

Representatives from both the property industry and community housing sector welcomed the changes.

Property Council chief executive Mike Zorbas said the build-to-rent concessions were game-changing.

"Eighty-thousand new homes over 10 years is more significant than any other effort made by a federal government to address the rental deficit in this country," he told reporters on Thursday.

Community Housing Industry Association chief executive Wendy Hayhurst highlighted the stipulation that 10 per cent of all homes built under the rules would need to meet definitions of affordability.

"It will create, over a longer period, a pipeline of genuinely affordable housing as well, something we haven't had in this country for a long time," she said.

The federal housing policy struggled to gain the political support needed to pass parliament but earlier in the week, the Greens chose to back the bill and forged a pathway through the Senate.

Michael Fotheringham from the Australian Housing and Urban Research Centre said built-to-rent was no panacea to the country's housing woes but a good policy to pursue if the goal was to improve urban density with more townhouses and apartments.

Corporate landlords tend to behave differently to small scale investors, he further explained.

"They're less likely to be thinking about flipping the property for capital gain and more likely to be thinking about long-term stability and rental yield as their income driver," he told AAP.