The 2018 Federal Budget is Good News for Homebuyers
Treasurer Scott Morrison announced the 2018 Federal Budget and with it some important news for the property market.
While there has been widespread speculation that the budget would include changes to negative gearing or capital gains tax, the government has left these areas relatively untouched and have instead opted to focus on long-term solutions to increase housing supply.
Here’s how the 2018 budget aims to help homebuyers break into the property market.
New land release
In order to meet the increased demand and help keep property prices stable, the government has announced that it will release more land suitable for new housing projects in further out areas and has left most tax incentives intact to encourage investor development. This means more homes for families and offers young people an opportunity to get a foot on the property ladder.
Further to this, they have also pledged $1 billion to establish a government-run National Housing Finance and Investment Corporation, which will operate as an affordable housing aggregator to encourage greater private and institutional investment and provide cheaper and longer-term finance to registered providers of affordable housing.
Upgrades to infrastructure
With intentions to increase the supply of residential homes in outer suburbs, the government has recognised the strong need for upgrades to infrastructure and as such has committed to spending $1 billion on an Urban Congestion Fund to reduce traffic and improve livability in these areas.
As well as this, they have also allocated $3.5 billion to the Roads of Strategic Importance Initiative that will focus on upgrading key freight corridors in regional Australia and connecting our major agricultural and resource areas with major cities and ports, which will ultimately provide greater employment opportunity for residents moving to these more remote areas.
Penalties for vacant land
Another way the government intends to increase housing supply is by unlocking vacant land often held long-term by investors with plans to resell for profit rather than build property.
Commencing July 2019, the government has introduced new measures aimed to discourage the practice of “land banking” by cutting tax incentives such as the ability to claim council rates and maintenance costs on vacant lots.
Once the new legislation comes into play, owners will only be able to claim these expenses once the property has received approval to be occupied and is available for rent.
Ultimately, the 2018 federal budget is good news for homebuyers and these new announcements mean that we can look forward to another promising year in the property market.
Please note that this is general information only. For more information specific to your individual circumstances, we encourage you to speak to a trusted financial advisor.