Federal Budget measures to address the housing shortage
Federal Budget measures to address the housing shortage
The 2024-2025 Federal Budget announcement addresses the nation's housing crisis with a multifaceted approach. With over $6.2 billion in new and additional spending, it’s clear that affordable housing and new housing infrastructure were a major focus. The Government has set a tough goal, and whether these measures will achieve their intended outcome is dependent on a lot of building blocks falling into place.
Additional support for key housing schemes
This year’s budget allocates significant new funding to existing schemes like the National Housing Accord and emphasises crucial 'last mile' infrastructure projects, such as water and sewage networks, to support new housing developments. The budget also tackles the construction sector's skill shortage by enhancing skilled worker visa programs and expanding education support through the provision of fee-free TAFE and VET places.
Even with additional funding, achieving the ambitious plan to build 1.2 million dwellings over five years under the National Housing Accord remains a key issue. This goal hinges on overcoming current legislative hurdles, having all tiers of government work together, and involving industry and investors in order to achieve an unprecedented pace of construction.
Targeted cost-of-living assistance
The Federal Budget addresses cost-of-living pressures by providing additional rental assistance and extending first-home buyer initiatives. Furthermore, BDO welcomes the dedicated funding allocated to the most vulnerable in our community, with housing initiatives addressing homelessness and victims of domestic violence.
Purpose-built student accommodation proposal
The measures announced included a novel proposal to boost student housing by partnering with the higher education sector, though details and funding for this initiative remain to be clarified. The Government is placing the onus on these institutions to create purpose-built student accommodation in order to continue to receive government support, freeing up student-occupied apartments for general housing supply.
Tax incentives for build-to-rent
The budget reiterates earlier tax incentives for build-to-rent investments and tasks the Foreign Investment Review Board with streamlining approval processes for this emerging asset class. It is good news indeed that build-to-rent is establishing itself as an asset class in its own right and will hopefully move into the mainstream as a contributor to our housing shortage.
BDO Comment
BDO supports the focus on the housing supply through a multi-pronged approach as well as a deliberate focus on those disproportionately most affected in our society by cost-of-living pressures and potential homelessness.
Notably absent from the budget are provisions for the aged care sector, a potential area for contributing to the overall housing supply if addressed in future.
Please contact one of our advisers to learn more about the tax incentives for build-to-rent and the advisory, tax, and consulting services we provide real estate and construction clients and investors.