With the second government of the year comes the second federal budget for 2022; here is how the first budget of the Albanese government impacts the property sector.
In what he described as a “solid and sensible” budget that aims to provide relief from cost-of-living pressure, Federal Treasurer Jim Chalmers announced additional commitments to the ones already announced aimed at improving Australia’s housing affordability.
Mr Chalmers announced a new National Housing Accord between governments, investors, and industry “to build the affordable homes our country desperately needs and to help tackle our housing crisis”.
“The ambition of this Accord is big, and it’s bold — an aspiration to build 1 million new, well-located homes over five years from 2024,” he added.
Mr Chalmers acknowledged that “most of this supply needs to come from the market, not the government”. However, he expressed his belief that “there’s a role for government — and we intend to play a leading role”.
On top of its existing commitments, the government announced an initial $350 million in additional funding for another 10,000 new and affordable homes at an energy-efficient rating of seven stars or greater (or a state or territory’s minimum standard).
“This will be delivered through an ongoing funding stream to help cover the gap between market rents and subsidized rents — making more projects commercially viable.
“State and territory governments will build on our commitment with up to 10,000 new homes as well — that’s up to 20,000 new affordable homes in total,” he said, adding that local government will tackle supply problems by land release and zoning policies.
Moreover, institutional investors — including superannuation funds — have endorsed the Accord and will work to “leverage more investment that delivers for their investors and members’ interests, and for the national interest”.
Also on the government’s housing agenda is encouraging more older Australians to downsize their homes, freeing up stock for younger families. Budget documents outline that “the Australian government is extending the exemption of home sale proceeds from asset testing from 12 months to 24 months”.
It is a move the government believes will afford pensioners more time to purchase, build, or renovate a new home before their pension is affected and will also see the government expand access to downsizer superannuation contributions for people after 55 to 59.
Moreover, the government also announced it would provide $46.2 million to assist current and former Australian Defence Force (ADF) members to purchase their home through the Defence Home Ownership Assistance Scheme.
In addition to its host of new announcements, the Albanese government also doubled down on a number of previously announced projects, including the Help to Buy scheme, which allows the government to make an equity contribution of up to 40 per cent of the purchase price of a new home and 30 per cent for that of an existing home, as well as the First Home Guarantee Scheme and the Regional First Home Support Scheme, which are open to 40,000 and 10,000 eligible Australians, respectively.
Mr Chalmers concluded that the budget is “a serious start — a serious agenda that will lead to more Australians knowing the security of a good job and decent housing”.