May 13 (Reuters) - Australia's largest lender, Commonwealth Bank of Australia ( CBAUF ) lost nearly A$30 billion ($21.7 billion) in value as its shares slid on Wednesday, after it set aside more cash to prepare for risks linked to the Middle East conflict and investors reacted to housing tax changes in the federal budget.

CBA shares closed down 10.43%, recording the largest ever one-day percentage fall for the bank. The S&P/ASX200 was off 0.46%.

The bank is considered one of the world's most expensive, meaning investors can react sharply to bad news given analysts say the stock is "priced to perfection".

CBA said cash net profit after tax stood at about A$2.7 billion ($1.95 billion) for the three months ended March 31, compared with about A$2.6 billion a year earlier. The result was about 2% below some analysts' forecasts.

Australian bank shares were sharply sold off on Wednesday as investors questioned whether mortgage credit growth could slow after major tax changes were announced on Tuesday.

Australia's centre-left Labor government said in its annual budget it would limit negative gearing for residential property, which allows investment losses to be ​offset against taxable income, to new buildings to help boost housing supply.

It also said a 50% capital gains tax (CGT) discount on assets held for more than a year would be scrapped. Instead, tax would be paid on inflation-indexed gains, with a 30% minimum tax on ​net capital gains.

The decision, analysts said, could slow investor mortgage demand from Australian banks as the sales turnover of existing housing was expected to weaken.

Morgan Stanley analysts predicted mortgage growth in Australia would slow to about 5.5% from 7.5% in 2027. They said investor loan growth could fall to 7% from 10% over that period.

Shares of Westpac, which has the second-largest mortgage lending business in Australia, were down 3% while National Australia Bank ( NAUBF ) was off 2.6% and ANZ Group ( ANZGF ) fell 1.65%. The S&P/ASX200 index was off 0.7%.

In its earnings report, CBA said mortgages, business lending, and household deposits all grew in the three months to March 31, which drove a 1% gain in its net interest income, despite competitive pressure in home and business loans.

CBA said it would increase its collective provisions by A$200 million as the bank revised its macroeconomic forecasts and increased the chance of a 'downside' economic scenario emerging.

The bank said its net interest margin for the quarter was broadly stable, excluding non-recurring tailwinds, but did not disclose a margin number in its limited trading update.

CBA's common equity tier 1 (level 2) ratio, a measure of spare cash, stood at 11.6% as of the end of March.

The company said its third-quarter loan impairment charges rose to A$316 million from A$223 million a year earlier, citing higher collective provisions as a result of increased geopolitical and macroeconomic uncertainty.

"Conflict in the Middle East is disrupting critical supply chains and contributing to global uncertainty," Chief Executive Officer Matt Comyn said.

($1 = 1.3816 Australian dollars)