Federal Treasurer Jim Chalmers has released the Federal Budget 2023-24 and here are some of the most significant announcements affecting property investors and the housing market.
Support for build-to-rent projects
Budget 2023-24 included the announcement of tax breaks to encourage build-to-rent projects, including the increase of depreciation rate from 2.5% to 4.00% per year for projects commenced after 9 May 2023.
On top of this, the government will be cutting the withholding tax rate for eligible fund payments from managed investment trusts (MIT) attributable to residential build-to-rent projects from 30% to 15%. This change will be effective starting 1 July 2024 for income attributable to newly built build-to-rent projects.
Boost to social and affordable rental homes
To improve the supply of rental housing, the federal government will be committing to support more social and affordable housing.
The commitment will include releasing additional $2bn in funding for the social rental housing segment and increasing NHFIC’s liability cap from $5.5 billion to $7.5 billion from 1 July 2023.
With the additional financing, NHFIC will be able to further support the segment by providing lower cost and longer-term finance to community housing providers.
Increasing Commonwealth Rent Assistance
The government is increasing the maximum rates of Commonwealth Rent Assistance by 15% at a cost of $2.7bn over five years. This is the largest increase to Commonwealth Rent Assistance in over three decades.
Around 1.1 million households receiving Commonwealth Rent Assistance will be better off.
Also read: What Federal Budget 2023-24 has for homeowners and homebuyers
Investing in infrastructure
Here are some announcements regarding the government’s commitment to boost Australia’s infrastructure:
- An independent strategic review will ensure the government’s $120bn pipeline over 10 years is fit for purpose and the government's investment is focused on projects which improve long term productivity, supply chains and economic growth in our cities and regions.
- Additional investment will be made to improve productivity, safety and resilience, including $200m to develop robust business cases for strategically significant projects.
- The $159.7 million urban Precincts and Partnerships Program is aimed at transforming cities and suburbs in partnership with state and local governments.
- Thriving Suburbs Program will be rolled out — it is a $211.7m project that will provide investment in community and economic infrastructure that enhances liveability and prosperity in suburban communities.
- The Government will provide $240m in funding to unlock the potential of Macquarie Point precinct in Hobart and $65 million for stadium redevelopment in Launceston.
Infrastructure investment for 2032 Summer Olympics
- The government will be providing up to $3.4bn in investment funding for the infrastructure needed for the Olympic and Paralympic Games in Brisbane 2032.
One million homes from 2024
The government will be working with state and territories, the Australian Local Government Association, investors and the construction sector through the National Housing Accord in the shared ambition to boost supply and build one million new homes from 2024.
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Photo by shisuka on Canva.
