Federal Budget 2025: Property Changes and Market Impact
The 2025 Federal Budget delivered a number of targeted measures that will directly affect property buyers, investors, and owners across Australia. From housing supply initiatives to tax treatment changes, here's a breakdown of what matters and how it could shape the market.
Key Property-Related Budget Measures
Help to Buy Shared Equity Scheme
The government allocated further funding to expand the Help to Buy scheme, which allows eligible buyers to purchase a home with as little as a 2% deposit, with the government holding an equity stake of up to 40% for new homes and 30% for existing homes. This is designed to reduce the deposit barrier for low-to-middle income earners and is expected to support demand in the sub-$800,000 price range in most capital cities.
Social and Affordable Housing Investment
An additional $2 billion was committed to the Housing Australia Future Fund, aimed at building tens of thousands of new social and affordable homes over the next five years. While this will take time to flow through, it signals a longer-term supply-side response to housing affordability pressures.
Tax Treatment of Build-to-Rent
The government confirmed changes to the managed investment trust (MIT) withholding tax rate for qualifying build-to-rent developments, reducing it from 30% to 15%. This is intended to attract institutional capital into rental housing supply. For investors and the broader rental market, increased institutional build-to-rent supply may gradually ease rental growth in major cities.
Foreign Investment in Housing
Tighter restrictions were announced on foreign purchases of established residential dwellings, with application fees increased and enforcement boosted. The intent is to prioritise Australian residents in the established housing market, though economists note the practical impact on prices is likely to be modest.
What It Means for Property Prices
In the short term, demand-side measures like Help to Buy will support price floors in first home buyer price brackets. The supply-side measures are medium-to-long term in nature — new social housing won't move the needle quickly. Investors should note that no changes were made to negative gearing or the capital gains tax discount, which remain intact.
What Borrowers Should Do
If you're considering entering the market or expanding your portfolio, now is a good time to understand how the budget changes may affect your eligibility or strategy. Speak with a Loan Rocket broker to assess how these measures apply to your situation.