Unlocking Homeownership: Key Developments in the Australian Federal Budget 2023/24

Afiyah
Post : May 26, 2023

Afiyah is here to provide you with an overview of the key developments in the Australian Federal Budget 2023/24 that are relevant to homebuyers and housing affordability. Let's explore the budget measures that aim to make homeownership more accessible and affordable:

Expansion of Home Guarantee Schemes:

The eligibility criteria for the First Home Guarantee and Regional First Home Buyer Guarantee will be expanded from July 2023. Now, any two borrowers, regardless of their relationship status, can jointly apply for these schemes to purchase their first home with a deposit as low as 5% without needing to pay Lenders' Mortgage Insurance (LMI). The scheme will also include individuals who already own a home but have not purchased a second property in the last decade.

Family Home Guarantee:

The Family Home Guarantee will now include unmarried legal guardians of children, such as grandparents, uncles, and aunts, in addition to single natural or adoptive parents with dependents.

Accessible to Australian Permanent Residents:

All three home guarantee programs, previously accessible only to Australian citizens, will now be available to eligible borrowers who are Australian permanent residents.

Tax Incentives for Build-to-Rent Projects:

To boost housing supply, the budget includes tax concessions for build-to-rent projects. From July 2024, the withholding tax rate for payments into funds from trusts involved in these projects will be reduced from 30% to 15%. Additionally, the capital works tax deduction depreciation rate for eligible new build-to-rent projects will increase to 4.5% from 2%.

Energy Savings Package:

The Energy Savings Package introduces initiatives to help households access savings and upgrades. The Household Energy Upgrades Fund will provide $1 billion to the Clean Energy Finance Corporation (CEFC) to enhance financing options for household energy upgrades. An additional $300 million will support upgrades to social housing, and $36.7 million will expand and upgrade the Nationwide House Energy Rating Scheme.

Electricity Rebate for Vulnerable Households:

From July 2023, eligible households can receive up to $500 in electricity bill relief through a partnership between the government and state/territory governments. The relief will primarily benefit pensioners, Commonwealth Seniors Health Card holders, and households receiving income support.

One Million New Homes by 2029:

The government has committed to the construction of one million new homes by 2029, with $350 million allocated for the construction of 10,000 affordable dwellings. The states and territories are responsible for delivering homes for low to moderate-income households.

Advancement of Social and Affordable Housing:

The National Housing Finance and Investment Corporation's (NHFIC) liability cap has been increased by $2 billion to enable community housing providers to access more low-cost loans, resulting in an estimated 7,000 additional affordable homes.

These measures aim to address housing affordability and provide opportunities for individuals and families to enter the housing market or access affordable housing options.

Wrap Up: The Australian Federal Budget 2023/24 introduces several key developments to improve housing affordability and accessibility for homebuyers. These measures include the expansion of Home Guarantee Schemes, tax incentives for build-to-rent projects, the Energy Savings Package, an electricity rebate for vulnerable households, a commitment to constructing one million new homes by 2029, and advancements in social and affordable housing. 

If you're considering purchasing a home or exploring your home loan options in light of these budget measures, We encourage you to reach out to Afiyah. Afiyah is well-versed in the latest developments and can provide personalised guidance to help you navigate the housing market and find the best home loan solution for your needs. 

Contact Afiyah now to start the conversation and take a step towards achieving your homeownership goals.

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