Blog

Federal Budget 2024: What It Means for Homeowners and Aspiring Buyers

May 21, 2024

Last week, the Australian Federal Government delivered the 2024 Federal Budget. Here’s everything you need to know as a homeowner or aspiring buyer:

Tax Cuts

Tax cuts set to roll out from July this year were introduced, building upon previous Stage 3 cuts. Individuals earning over $18,200 annually will see a 3% reduction in tax liability on every dollar earned within the $18,200 to $45,000 income bracket.

Energy Bills

Every Australian household will receive a $300 reduction on their energy bills. This move aims to ease the burden of rising living costs. This initiative is part of a $3.5 billion package designed to support households in managing their expenses.

Changes to HECS Indexation Calculation

The government will wipe $3 billion in HECS debts and overhaul the student debt repayment system. As part of this, the method for indexing HECS debts will change. Currently, debts increase annually based on inflation (‘indexation’). Under the new system, the indexation rate will be determined by the lower of two metrics: the Consumer Price Index (CPI) or the Wage Price Index (WPI). Currently, inflation sits lower at 3.6%, making it the prevailing metric for indexation. This change aims to slow down the rate at which HECS debts accumulate. The scheme will be backdated to the previous year, when student debts increased by 7.1%, pending approval by Parliament.

Housing Initiatives

The Federal Budget includes $6.2 billion for new housing measures. This funding will address various housing challenges, including affordability and homelessness.

Rent

An additional $1.9 billion has been allocated to fund rent subsidies for welfare recipients over the next five years. Australians receiving government assistance for rent will receive an extra 10% in rent assistance starting from September.

Emergency Housing

$1 billion will be directed towards building crisis accommodation for victims of domestic violence. This investment forms part of the government’s strategy to combat intimate partner violence and provide support for affected families.

University Accommodation

Universities will be required to expand their student housing facilities. This initiative follows plans to limit international student numbers. Universities will be incentivised to accept more international enrolments based on their provision of housing. $2.1 million has been allocated for additional university accommodation.

Northern Territory Housing

$4 billion in joint funding from the Federal and NT Governments will go towards building new homes to address overcrowding in the territory. This initiative aims to build 270 homes per year over 10 years and includes funding for urgent repairs on existing homes.

Help to Buy Scheme Expansion

The financial year 2024-25 marks a significant milestone for the Help to Buy Scheme, with an additional $5.5 billion committed for that period. Under this scheme, the government will provide an equity contribution of up to 40% of the purchase price for new homes and 30% of the price of existing homes. This expansion aims to further support eligible households in their quest for homeownership by providing them with the necessary financial assistance to make their dream of owning a home a reality.

Seizing Opportunities: Your Path to Homeownership

As we wrap up our exploration of the 2024 Federal Budget’s impact on homeowners and aspiring buyers, it’s clear that exciting opportunities lie ahead. From tax cuts boosting borrowing power to housing initiatives opening doors to affordable accommodation, the landscape is ripe with potential.

With every Australian household set to receive energy bill relief and the Help to Buy Scheme expanding its reach, the path to homeownership has never been more accessible. The government’s commitment to addressing housing affordability challenges and supporting individuals on their journey towards owning a home is evident in the comprehensive measures outlined in the budget.

As you navigate the housing market, remember to stay informed and seek guidance from trusted sources, such as mortgage brokers, to make informed decisions aligned with your financial goals. With the right strategies in place and the support of government initiatives, your dream of owning a home is well within reach.