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Federal Budget focuses on affordability 20/05/2017

I have regularly discussed in this column the critical need to address housing affordability in Western Australia and across the country as particularly those on low incomes may struggle to put a roof over their heads.

I have regularly discussed in this column the critical need to address housing affordability in Western Australia and across the country as particularly those on low incomes may struggle to put a roof over their heads.

It was therefore very pleasing to see the federal government focus on addressing housing affordability in last week’s budget via a range measures that will, at a broader level facilitate the delivery of more affordable development projects and at a more micro level, assist first home buyers and downsizers with their home ownership goals.

The good news for first home buyers in the immediate term is the option to voluntarily contribute up to $30,000 into their superannuation account to save faster for a home deposit. The First Home Super Saver Scheme could mean saving up to 30% faster for that much needed deposit.

Older Australians will also benefit in relation to super, with individuals over 65 able to contribute up to $300,000 from the sale of their primary residence into superannuation. For couples that means potentially being able to contribute up to $600,000.

This measure is aimed at encouraging older people to downsize into more appropriate accommodation and free up those larger homes for younger families.

While these measures will assist at an individual home ownership level, the bigger picture in terms of ensuring the adequate supply of affordable housing to the market has been addressed through higher level policy and taxation changes.

The federal government has adopted UDIA’s recommendation to establish a National Housing Infrastructure Facility which will assist with funding local governments to provide essential infrastructure for new housing in greenfield and infill locations.

Under-utilised and surplus Commonwealth land will also be made available for housing development in the first instance.

There is also encouragement for the private sector to invest in more affordable housing projects through offering a 60% discount on Capital Gains Tax if an investment property is held for a minimum of three years in aggregate and rented out at below market rent for tenants on low to moderate incomes and managed by a registered community housing provider.

Managed Investment Trusts will also be allowed to be set up to acquire, construct or redevelop property to hold as affordable housing to incentivise foreign and domestic investors to invest in affordable housing.

Of course, affordability is not just about the cost of housing itself. Cost of living factors, particularly travel, also impact significantly on affordability.

In this regard, the investment of $1.6B for road and rail, particularly Metronet, will assist with easing traffic congestion and allowing better access for more residents across Perth to public transport.

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