What’s in the Federal Budget for Housing?
Posted on June 03, 2024
As the Australian Government unveils its Budget for 2024-25, a spotlight shines on the housing sector with a suite of measures aimed at increasing supply and relieving pressure in the market. From supporting the construction of additional homes to assisting renters and facilitating home ownership for low-income Australians, the initiatives may not be groundbreaking but are set to make a positive impact.
Increasing Housing Supply
The National Housing Accord, which seeks to deliver 1.2 million new homes by 2029, will be supported in this budget by an extra $1 billion allocated to the Housing Support Program for states and territories to develop the roads, sewerage, energy and water infrastructure required to enable new homes to be built.
Further measures to increase housing supply include:
- Regulatory reforms to require universities to deliver more purpose-built student accommodation to ensure increases in international student numbers do not put further pressure on the domestic housing market
- $88.8 million to fund 20,000 additional fee-free TAFE and pre-apprenticeship places for construction trades to address skills and labour shortages
- $20.8 million over five years for research and development of evidence-based housing policy
Other measures are targeted at supporting vulnerable Australians, including $1 billion towards crisis and transitional housing for youth, and women and children experiencing domestic violence through the National Housing Infrastructure Facility.
Funding for a new five-year, $9.3 billion National Agreement on Social Housing and Homelessness with the states and territories includes a doubling of the Australian Government’s dedicated homelessness funding to $400 million a year.
Assistance to Buy
To help prospective buyers purchase their homes, the Government has introduced legislation to establish the Help to Buy scheme at a cost of $5.5 billion from 2024-25. If the legislation can pass parliament, Help to Buy will assist up to 40,000 Australians on low to moderate incomes to purchase a home with an equity contribution from the Government of up to 40% for new homes or 30% for existing homes.
The Home Guarantee Scheme will continue to assist up to 50,000 households into home ownership each year and includes the Regional First Home Buyer Guarantee and broadened eligibility criteria.
Support for Renters
The Government is embracing the growing need for specialist rental accommodation by encouraging foreign investment in build-to-rent developments.
Included in the budget are the incentives announced earlier this year; that is, halving the managed investment trust withholding tax rate and increasing the capital works tax deduction rate for newly constructed build-to-rent properties at a cost of $34.5 million over five years from 2022-23. The Government has also significantly reduced the foreign investment application fees for new build-to-rent developments and for foreign investors to purchase established build-to-rent developments.
Further measures to assist renters include a 10% increase to Commonwealth Rent Assistance payments and a plan to work with states and territories to strengthen renters’ rights.
Community Housing
Community housing providers will benefit from an additional $1.9 billion in concessional loans to support the delivery of new social and affordable housing under the Housing Australia Future Fund and the National Housing Accord.
There will also be support for more community housing providers to access finance through the Affordable Housing Bond Aggregator as the Government increases the cap on their guarantee of Housing Australia’s liabilities to $10 billion, with an associated increase in the line of credit that supports the Aggregator to $4 billion.
Our experienced team of property lawyers and conveyancers are ready to assist you with any step in the home buying or development process.
