News, Articles, & Resources

Albanese Government Federal Government Budget

Article

Analysing the Impact of the 2023-24 Albanese Government Budget on Property Owners: Unveiling Key Insights  

In their latest Federal Government Budget announcement, the Albanese Government demonstrated its commitment to supporting property owners amidst the soaring cost of living. Building upon their initial Budget unveiled six months ago. This new financial plan aims to lay stronger foundations for a brighter future. Discover the key measures implemented, which encompass: 

  1. Easing the burden of living expenses: Assisting with electricity expenses, reducing healthcare expenses, extending support to vulnerable Australians, fostering affordable housing, and ensuring steady wage growth. 
  1. Enhancing the resilience of Medicare: Making significant investments in Medicare, enhancing accessibility to primary healthcare services, and prioritizing health protection and preventive measures. 

Key Housing Initiatives of the Albanese Government Budget 

On the evening of May 9th, the Albanese Government 2023-24 Budget was revealed, strongly emphasising mitigating the impact of rising inflation for Australians. Through the National Housing Accord, the Government has collaborated with states, territories, the Australian Local Government Association, investors, and the construction sector to increase the housing supply and construct one million new homes starting in 2024. Expanding on this commitment, the Budget introduces enhanced incentives for long-term rentals, increased investment in social and affordable housing, and improved pathways to homeownership. 
 
In a momentous move to tackle the pressing issue of housing affordability, the Albanese Government Treasurer revealed a robust array of measures as part of a ground-breaking $14.6 billion plan. Within the Budget’s blueprint, the following highlights take centre stage, aiming to revolutionize the housing market and uplift Australians: 

Commonwealth Rent Assistance  

To alleviate renters’ challenges, the Albanese Government Budget introduces a significant 15 percent increase in the maximum rates of Commonwealth Rent Assistance—the largest increase over three decades. This adjustment translates to an additional $31 per fortnight for individuals renting in the private market and community housing. This measure aims to support approximately 1.1 million households, enabling recipients to better navigate the rising living costs amidst substantial rent growth. Furthermore, renters will benefit from enhanced protections through reforms initiated by the National Cabinet, strengthening their rights nationwide. These initiatives also offer valuable support to our clients with investment properties, allowing them to adjust rental income to accommodate potential interest rate hikes. 

Home Guarantee Scheme  

It was revealed that the Home Guarantee Scheme is set to expand starting from July 1st. This expansion aims to facilitate greater access to property ownership for more Australians by broadening the eligibility criteria. The expansion of the scheme will enable the following: 

  1. Any 2 eligible borrowers to be joint applications for a guarantee beyond married and de facto couples. 
  1. Australian Permanent Residents, not just Australian citizens, to access the Home Guarantee Scheme. 
  1. A single legal guardian of children to access the Family Home Guarantee. 

       4.  Non-first home buyers who have not owned a property in Australia in the preceding 10 years to access the First Home Guarantee and Regional Home Guarantee. 
 

National Housing Finance and Investment Corporation (NHFIC)  

In a notable move, the Albanese Government is set to rename Housing Australia and allocate an extra $2 billion to bolster the National Housing Finance and Investment Corporation (NHFIC). This increased funding raises the NHFIC’s liability cap to a total of $7.5 billion, facilitating expanded lending to community housing providers for social and affordable housing initiatives.  

While this infusion of funds may potentially moderate property growth as an investment avenue due to increased supply, we anticipate that the overall impact on growth potential in robust property markets will remain limited. If you seek further details regarding this statement, we encourage you to contact us for more information. 

NHFIC’s Investment Mandate  

As part of the government’s commitment to enhancing support for social and affordable housing nationwide, significant changes are being made to the NHFIC’s Investment Mandate. These amendments will necessitate the NHFIC to take necessary measures to allocate a minimum of 1,200 homes to be delivered in each state and territory within five years of initiating the Housing Australia Future Fund’s operation. These efforts aim to improve home buyers’ access and expand the availability of social and affordable housing options throughout the country. 

Redirecting interest earnings on unallocated NHFIC funds  

All interest earnings generated from unallocated NHFIC funds will be redirected towards supporting the expansion and delivery of housing priorities. 

Household Energy Upgrades Fund  

The introduction of the $1.3 billion Household Energy Upgrades Fund aims to drive energy improvements in households. This fund will establish low-interest loans and finance upgrades for social housing, with the primary objective of enhancing energy performance. By injecting $1 billion into the Clean Energy Finance Corporation, the Household Energy Upgrades Fund will unlock over 110,000 low-interest loans for property owners to pursue energy-saving home upgrades. Collaborating with private lenders, this initiative encourages widespread adoption of energy-efficient practices. 

Nationwide House Energy Rating Scheme  

Expanding the scheme to include existing homes brings significant benefits, allowing individuals to obtain an energy performance star rating for their homes. This rating system empowers Australians to make well-informed decisions regarding renting, purchasing, or renovating their properties, ensuring they can optimise their financial savings. The Nationwide House Energy Rating scheme, in conjunction with the built-to-rent incentives, represents commendable initiatives. These efforts contribute to the sustainability of new homes and investment properties by offering slightly higher tax breaks and making these properties more appealing due to their cost-effectiveness for residents. 

Contingency Reserve Supporting Upgrades to Social Housing  

As part of the Albanese government’s commitment to supporting home upgrades that enhance energy performance and savings, a significant portion of the funds, amounting to $300 million, will be allocated to the Contingency Reserve over a four-year period starting from 2023-24. These reserved funds will be specifically designated to support upgrades to social housing, focusing on initiatives that contribute to energy conservation and efficiency. 

Built-to-Rent Tax Break  

The government has introduced tax incentives specifically targeted at build-to-rent projects to stimulate the housing supply. These incentives aim to encourage investment and construction in the build-to-rent sector. The key measures include: 

  1. Reduction of Withholding Tax Rate: The withholding tax rate for eligible fund payments from managed investment trusts pertaining to newly constructed build-to-rent developments will be reduced from 30 to 15 percent.  
  1. Increased Capital Works Tax Deduction: The capital works tax deduction, also known as depreciation, will increase the rate from 2.5 to 4 percent per year. This higher deduction rate will enhance the after-tax returns for newly constructed build-to-rent developments. 

By implementing these tax incentives, the government seeks to unlock the construction of approximately 150,000 rental properties over a 10-year period. 

Defence Housing Feasibility Review 

To address the housing challenges faced by Australian Defence Force (ADF) personnel, promote property ownership, and meet the future housing needs of the ADF, a dedicated allocation of $2 million has been earmarked for a defence housing feasibility review in the 2023-24 fiscal year. 

Maximising opportunities and overcoming challenges: Vision can help you navigate the Albanese Government Budget 2023-24  

The recently unveiled Budget for the new financial year, released by the Albanese Government, brings forth a range of measures that may pose challenges or present significant opportunities for you. At Help My Wealth, we understand the importance of navigating these changes and ensuring that your specific needs are addressed. We invite you to discuss your goals with us, as we are dedicated to thoroughly understanding your unique circumstances. By doing so, we can guide you through these challenging times and towards your financial aspirations.  

For investors, the government budget’s increase in the maximum rates of the Commonwealth Rent Assistance brings valuable opportunities for expanding your property portfolio. Similarly, the expanded eligibility of the Home Guarantee Scheme provides first home buyers with an enhanced chance to secure affordable housing, offering greater stability during these times of economic uncertainty. 

Regardless of who you are or what stage of life you’re in, we are committed to being your reliable guide. Take the first step by contacting us today and let us assist you in navigating these changes and achieving your financial aspirations. 

Albanese Government Federal Government Budget

Article

Analysing the Impact of the 2023-24 Albanese Government Budget on Property Owners: Unveiling Key Insights  

Search

Category

Recent News

Any Question?