Federal Budget 2023: Impact on Canberra Property Market
16
Jun

Federal Budget 2023: Impact on Canberra Property Market

The Federal Budget 2023 was a juggling act for the Federal Government. On the one hand, it didn’t want to add to inflation by pumping a lot of money into the economy, leading to higher costs of living and interest rates – whilst, on the other hand, it sought to spend money to assist the poorest and lowest paid Australians.

The third hand, the ‘invisible hand’ or the private sector, including Canberra property investors, held their collective breaths …

So, what does the 2023 Federal Budget mean for the Canberra property market and property investors?

With over 30 years of experience in the Canberra real estate market, Maloney's Property sheds light on the significant aspects of the budget impacting local property investment.


The National Housing Accord

The Federal Government has brought together all three levels of government, investors and the construction sector, in the National Housing Accord, with the goal of building 1,000,000 new homes from 2024.

The Government says that the 2023 Federal Budget provides more incentives for the following:

  • long-term rentals,
  • investment in social and affordable housing, and
  • improved pathways to home ownership.


Investment in build-to-rent projects

New incentives announced in the 2023 Federal Budget include:

  • A reduction in withholding tax for fund payments from managed investment trusts for new build-to-rent developments cut from 30% to 15%.
  • An increase in the capital works tax deduction rate from 2.5% to 4% per year, enhancing after-tax returns for new build-to-rent developments.

The Government says that the industry estimates this could unlock 150,000 rental properties over ten years, boosting the supply of long-term rentals in the Australian market.


Investment in social and affordable housing

The Government announced in the Budget that it intends to increase the National Housing Finance and Investment Corporation's liability cap by $2 billion to $7.5 billion, providing more lending to community housing providers for social and affordable housing projects.


Changes to the Home Guarantee Scheme

  • The Government will expand eligibility for the First Home Guarantee and Regional First Home Guarantee to any two eligible borrowers beyond married and de facto couples and non-first home buyers who have not owned a property in Australia in the preceding ten years.
  • Australian Permanent Residents, in addition to Australian citizens, will be eligible for the Home Guarantee Scheme.


Increase to Commonwealth Rent Assistance

Commonwealth Rent Assistance is increasing by 15 per cent at $2.7 billion over five years, the most significant increase in Commonwealth Rent Assistance in 30 years.


Canberra-specific initiatives in the 2023 Federal Budget

Few initiatives in the Federal Budget were specific to Canberra – but those that were included:

  • Funding for 10,000 additional public servants
  • $15m for electricity bill relief in 2023-24
  • $7.5m in 2023-24 for the Sustainable Household Scheme to provide concessional loans to electrify and improve the energy efficiency of homes
  • $152.1m infrastructure funding in 2023-24 for projects yet to be identified
  • 535m over four years to Australia’s national institutions, including:
    • $146.2m to the National Library of Australia
    • $119.1m to the National Gallery of Australia
    • $78.4m to the National Museum of Australia
    • $37.9m to the Museum of Australian Democracy

The Federal Government is focussing on initiatives to increase the supply of rental housing and home ownership in Australia, and there have been some significant initiatives to support the Australian public service and national institutions based in Canberra in the 2023 Federal Budget.


Navigating the Changes with Maloney’s Property 

As your trusted real estate advisor, Maloney’s Property is here to help you navigate these changes. We offer expert insights into local property investment and will work diligently to turn these Federal Budget 2023 changes to your advantage of buying, selling, renting, or managing your property.
 
Feel free to reach out to us for any specific questions regarding the Canberra property market. Trust Maloney's Property to help you leverage market changes for more robust property investment in Canberra.

 

*Disclaimer: The effects of the federal budget 2023 will vary based on individual circumstances. Hence, this blog offers general advice and insights and should not replace personalised financial advice.

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