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22 May 2024

Federal Budget Unveils Measures to Strengthen Housing and Construction Sectors

Federal Budget Unveils Measures to Strengthen Housing and Construction Sectors

The 2024-25 Federal Budget has introduced several initiatives aimed at boosting housing supply and supporting the construction industry.

The government's strategy involves collaborating with state, territory, and local governments to implement reforms that will enhance housing supply and affordability as part of the National Housing Accord in the next six months.

Key measures to incentivize housing supply include reducing the withholding tax rate for eligible managed investment trust fund payments attributed to newly constructed properties. Additionally, the capital works tax deduction rate for newly constructed build-to-rent developments will increase, potentially unlocking 150,000 new rental properties over the next decade.

The National Housing Finance and Investment Corporation's liability cap will be raised by $2 billion, enabling more lending to community housing providers for social and affordable housing projects. Furthermore, $350 million over five years is committed under the National Housing Accord to support the delivery of 10,000 affordable homes by states and territories.

The government is also in discussions with states and territories to make an additional 300,000 TAFE and vocational training places fee-free, focusing on industries like construction to develop a skilled workforce.

The Property Council of Australia and the Independent Tertiary Education Council Australia (ITECA) have welcomed the government's initiatives, recognizing them as positive steps towards addressing housing affordability and supply constraints, as well as addressing skills shortages in the construction industry.

However, the Property Council emphasized the need for further immediate labor supply to meet the nation's ambitious housing targets, suggesting the government should prioritize a greater percentage of skilled migrants with construction qualifications.

Overall, the Federal Budget's focus on tax incentives, funding for social housing, workforce training, and planning reforms reflects a comprehensive approach to strengthening the housing market and the construction sector in the coming years.

 

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