Key Policies for Property Investors in Budget 2023-24

Federal Treasurer Jim Chalmers has announced the Federal Budget 2023-24, which includes several policies affecting property investors and the housing market. Here are the key takeaways:

  1. Tax breaks for build-to-rent projects: To encourage build-to-rent projects, the depreciation rate will increase from 2.5% to 4% per year for projects starting after May 9, 2023. Additionally, the withholding tax rate for eligible fund payments from managed investment trusts (MIT) for residential build-to-rent projects will be cut from 30% to 15%, effective from July 1, 2024.

  2. Boost to social and affordable rental homes: The government will commit an additional $2 billion in funding for social rental housing and increase the National Housing Finance and Investment Corporation's (NHFIC) liability cap from $5.5 billion to $7.5 billion, starting July 1, 2023. This will enable NHFIC to provide lower-cost, longer-term finance to community housing providers.

  3. Increasing Commonwealth Rent Assistance: The maximum rates of Commonwealth Rent Assistance will increase by 15%, costing $2.7 billion over five years. This is the largest increase in over three decades and will benefit around 1.1 million households.

  4. Investing in infrastructure: The government will conduct an independent strategic review of its $120 billion, 10-year infrastructure pipeline to ensure it supports long-term productivity, supply chains, and economic growth. Additional investments include $200 million for business case development, $159.7 million for the urban Precincts and Partnerships Program, $211.7 million for the Thriving Suburbs Program, $240 million for Macquarie Point precinct development in Hobart, and $65 million for stadium redevelopment in Launceston.

  5. Infrastructure investment for 2032 Summer Olympics: The government will provide up to $3.4 billion in funding for infrastructure needed for the Olympic and Paralympic Games in Brisbane 2032.

  6. One million homes from 2024: The government, in collaboration with state and territory governments, the Australian Local Government Association, investors, and the construction sector, will work towards building one million new homes from 2024 through the National Housing Accord.

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Cristiane RubinComment