What the federal budget means for buying property

Last week, Federal Treasurer Jim Chalmers handed down his fourth federal budget. This year the budget is in a deficit, meaning it will spend more than it earns, with the government saying it was designed to help Australians with the cost of living. We have broken down some of the key takeaways that could impact you.

Buying property

 

Help to Buy scheme

This is a shared equity program that enables first-home buyers to purchase property with just a 2% deposit. The federal government then provides 30% of the purchase price of an existing home, or 40% of a new home, in exchange for a portion for the home’s equity. Owners can then buy out the government’s share over time.

The scheme is capped at 10,000 places annually (40,000 places over four years). The income caps have increased for eligible buyers from $90,000 to $100,000 for singles and from $120,000 to $160,000 for joint applicants or single parents. Property caps have also been increased to better reflect the market in regional and capital centres in each state and territory.

Infrastructure initiatives

The budget has allocated funding to several major infrastructure initiatives across the country. These will likely impact housing development and reshape property markets in these areas. Some of the initiatives receiving funding include:

• Western Sydney, including for the South West Sydney Rail Extension
• Upgrades to Sunshine Station in Victoria
• The Victorian Road Blitz program
• Safety upgrades on the Bruce Highway in Queensland
• Kwinana Freeway upgrades in Western Australia
• Stuart Highway duplication between Darwin and Katherine
• Arthur Highway upgrades in Tasmania

Encouraging more tradies

One of the biggest barriers Australia has been facing in increasing housing supply is the shortage of skilled tradespeople. The federal government announced it would address this with a new Housing Construction Apprenticeship stream that will give eligible apprentices up to $10,000. It will be paid in $2,000 installments at six, 12, 24, 36 months and at the completion of their apprenticeship. This initiative will commence on 1 July 2025.

Foreign investors are out

It was announced foreign investors will be banned from purchasing existing homes in Australia for two years starting from 1 April 2025. Funds were also allocated to preventing “land banking” by foreign investors. This is intended to open up more opportunities for local buyers to purchase their own property.

Prefabricated homes

$54 million has been allocated to support the construction of prefabricated and modular homes. These are homes that are primarily constructed offsite before being assembled in their final location and could be built up to 50% faster than traditional homes.

 

 

Cost of living

 

Tax cuts

From 1 July 2026, the tax rate will be cut from 16% to 15% on income earned between $18,201 and $45,000. This will then reduce to 14% from 1 July 2027. Taxpayers could end up with an extra $268 in their pocket in the first year and $536 from the 27/28 financial year. The income threshold before the Medicare levy is applied will also be increased, potentially making around 1 million more Australians exempt from the levy or paying a reduced rate.

Electricity bill relief

Rebates on electricity bills will be extended by six months with households and small businesses receiving $150 toward their power. This rebate will be automatically applied over two quarterly instalments. This is intended to not only help with cost of living pressures, but also reduce inflation (the government predicts by about half a percentage point this year).

Childcare

The new 3-day guarantee ensures families are eligible for at least three days of subsidised childcare weekly, replacing the previous Child Care Subsidy Activity Test. This is due to commence on 5 January 2026 and is expected to benefit an additional 100,000 families in its first full financial year.

Health

Funding will be allocated to incentivise GPs to bulk-bill more patients. The goal is for nine out of 10 visits to the GP to be fully covered by Medicare.

There is also a boost to the Pharmaceutical Benefits Scheme (PBS), cutting the cost of a script from $31.60 to $25 from the start of 2026.

Changing jobs

Have you ever seen clauses in your work contract that say you cannot work for a competing business within a certain time frame of leaving your job? The government says these can suppress wages and so will ban the clauses for workers earning less than $175,000. This enables them to move to a competing business or start their own.

 

Businesses

 

No extension for the instant asset write-off

The tax benefit will end in July this year with no announcements for an extension. The instant asset write-off enables eligible businesses to claim a $20,000 deduction from their taxes, with this dropping to $1,000 in the next financial year.