On Tuesday, May 8, Treasurer Scott Morrison delivered the 2018 Federal budget speech.
On Tuesday, May 8, Treasurer Scott Morrison delivered the 2018 Federal budget speech. The budget addressed issues such as personal and business tax offset, infrastructure growth and implementing a Pension Work Bonus (allowing pensioners to earn up to $300 more per fortnight), all wonderful things to be concentrating on in the coming year. However, some Australians are wondering why there was no mention of addressing housing affordability.
Unfortunately, the budget can’t address every sector and industry each year. Instead, the government addresses the areas that are of the most concern.
When asked, Scott Morrison said first homeowners will benefit from the incentive introduced during the federal budget last year. In 2017, the First Home Super Saving Scheme was introduced — an incentive that allows people to save home deposits in their superannuation accounts, tax-free.
Along with the superannuation scheme, the government has been helping potential homeowners with the First Home Owners Grant (FHOG). This has helped exponentially with some of the costs of owning a first home, or saving to buy one. Housing developments, like Mirvac, are offering off the plan apartments under this scheme. Many people have benefited, and now they own the places they live — a dream they never thought possible before the FHOG.
Potential first-time buyers in NSW and Victoria can access grant which provides relief for homeowners who buy brand-new homes (which haven’t previously been lived in) that are valued up to $750,000 — this is perfect for anyone looking to buy brand-new off the plan apartments. Grant applicants will receive a payment of $10,000 to offset the initial deposit fee, meaning applicants only have to save 5% of the initial deposit rather than the standard 10%, which, although it sounds small, is the difference between saving for another two-three years or investing now while the price of the suburb you are looking to live in is at a premium.
The budget also introduced a cutback in tax incentives. Property owners will no longer be able to claim expenses such as council rates and maintenance costs for vacant land in their tax returns and stamp duty, overall, is expected to grow 3.8% to $7.1 million. This effectively places pressure on potential home investors and developers meaning first home owner occupiers are less likely to get pushed out of auctions for new homes by property investors.
The budget not only helps first home owners, it’s also addressing housing concerns for our elderly. Contrary to last year, where the emphasis was on mobilising older homeowners into downsizing, this year the Pension Loans Scheme is now available to all retirement-aged homeowners. Every homeowner over the age of 65 can reverse their mortgages worth up to $11,799 annually for the rest of their lives. This means stress on aged care facilities will be lifted, allowing more funding to go into more meaningful areas.
So, despite seemingly ignoring the concerns of housing affordability for first-time homeowners, the government federal budget is actually still helping us all out. Australians are still benefiting in the pre-existing schemes First Home Super Saving Scheme and First Home Owners Grant and have nothing to worry about.
Sign up for new development alerts.
Receive every new listing in your inbox