Australian Federal Budget 2023 

The Australian Federal Budget (‘Federal Budget’) for 2023 holds particular significance for the real estate sector as it shapes Australia’s path to easing the threshold for property ownership and the impacts of the housing crisis.   

Home Guarantee Scheme


The Home Guarantee Scheme (‘Scheme’) in Australia is a government initiative aimed at assisting 35,000 eligible first-home buyers to enter the property market. The Scheme was introduced to address challenges faced by many aspiring homeowners, such as saving for a sufficient deposit to secure a home loan. 

Under the Scheme, the government provides a portion of the deposit, as such, eligible individuals are able to provide a deposit as low as 5% without having to pay for lenders’ mortgage insurance (‘LMI’). LMI is generally required by lenders when borrowers have a deposit of less than 20% of the property’s value.  


Previously the Scheme was applicable to individuals or couples who have not previously owned property. To enhance housing affordability and provide pathways to homeownership for a broader spectrum of individuals, the government has expanded the eligibility criteria to include friends, siblings, and even non-first-home buyers. Non-first-home buyers who have not owned property in the last 10 years will be provided with the opportunity to re-enter the property market.  

Income and Rental Support

Recognising the importance of supporting low-income individuals, families, and vulnerable members of society during challenging times, the Federal Budget increases income support payments and rental support to ease rising costs.  

When coupled with the Scheme, the threshold to enter the property market for low-income earners and renters is more accessible.   

Housing Development   

To address the shortage of rental properties, the Australian Government has introduced new incentives to stimulate the housing supply by reducing the withholding tax rate from 30% to 15% for eligible fund payments from managed investment trusts for newly constructed build-to-rent developments.  

This reduction aims to encourage investment in the build-to-rent sector by making it more attractive for managed investment trusts to allocate funds for such developments.  

The capital works tax deduction rate will be increased from 2.5% to 4% per year for newly constructed build-to-rent developments. This increase allows property developers to claim a higher percentage of capital works expenses as tax deductions over time, motivating developers to engage in these types of projects. 

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At W Legal Group, we pride ourselves in assisting home buyers, renters and property developers in their property journey. Call or email us if you have any questions for our expert legal team. 

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