As the Australian Federal Budget 2024-25 Rolls Out, Homeowners are set to receive some much-needed relief. Some strong initiatives are designed to ease the pressures of cost of living alongside supporting the homebuyers. This is expected to give a good boost to housing supply. Although these initiatives are likely to be welcomed by mortgage holders and expected homebuyers, the likelihood of tighter monetary policies from the Reserve Bank could temper the overall positive sentiments. Let’s have a look at how these new federal budget measures impact home loan borrowers and fresh entrants to the property market in Australia.
Easing Pressures of Cost of Living
The Budget introduces several measures aimed at easing the financial strains on Australians:
- Increased Rent Assistance: The government is injecting $1.9 billion to boost Commonwealth Rent Assistance by 10%, benefiting a million households.
- Cheaper Medicines: A $3 billion agreement with community pharmacies will lower medicine costs.
- Student Debt Relief: $3 billion in student debt will be waived to make loans more equitable.
- Energy Rebates: The new power bill relief includes a $300 energy rebate for households and $325 for small businesses. These rebates are anticipated to reduce the headline inflation by approximately half a percent point in 2024-25.
Federal Budget Boosting Housing Supply
To tackle housing shortages and improve affordability, the Budget outlines a robust plan:
- $6.2 billion: To support new housing developments.
- $1 billion: Additional funding for states and territories for essential infrastructure to facilitate new housing projects.
- $1.9 billion: Allocated for loans to support social and affordable housing.
- $1.9 billion: Directed towards concessional finance for social and affordable housing.
- $423 million: Earmarked for the National Agreement on Social Housing & Homelessness.
Federal Budget: Tax Cuts for Australian Taxpayers
Effective from July 1st, 2024, the Australian Government will be implementing some important tax cuts:
- The tax rate of 19% will drop to 16%.
- The 32.5% tax rate will be reduced to 30%.
- The income threshold for the 37% tax rate will increase from $120,000 to $135,000.
- The income threshold for the 45% tax rate will rise from $180,000 to $190,000.
These Stage 3 tax cuts are intended to provide substantial relief in the cost of living, especially for middle-income groups in Australia, while also minimizing additional inflationary pressures.
Supporting Wage Growth
The Budget also emphasizes efforts to boost wages and reduce inflation:
- Various government initiatives to increase wages and combat inflation have resulted in significant wage growth for the first time in over five years.
- A sustained focus on gender equality has driven the Fair Work Commission to examine occupations and industries with gender pay gaps and possible undervaluation of work.
- Funding has been allocated to support wage increases for workers in aged care and early childhood education and care sectors.
Explore Your Options
If you want to understand how the Federal Budget impacts your finances or if you are considering buying a home, we at Loan Junction, with a team of expert mortgage brokers, are available to help and guide you.
This is an ideal time to explore your options before potential rate hikes occur. So, do not delay further! Contact us today through our website for more tailored solutions.
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