Federal Budget 2025-26: Key Changes for Australian Homebuyers  

The 2025-26 Federal Budget has been announced, and it includes some big plans to tackle Australia’s housing challenges.  

At the heart of this budget is a $33 billion plan to build 1.2 million new homes by 2030. This shows the government’s commitment to making housing more affordable and available. 

Let’s look at the key parts of this budget and how they might affect you, whether you’re a first-time buyer, a current homeowner, or just interested in the property market. 

Helping First Time Home Buyers 

A Bigger Helping Hand 

If you’re hoping to buy your first home, the government has some good news. They’re expanding the Help to Buy scheme, increasing its funding from $5.5 billion to $6.3 billion. This means that over the next four years, 40,000 more Australians will have a chance to get onto the property ladder. 

The expanded Help to Buy scheme is a promising step towards making homeownership more accessible. Income thresholds have increased from $90,000 to $100,000 for singles and from $120,000 to $160,000 for couples, allowing thousands of additional buyers to qualify. This change reflects the government’s effort to address rising living costs and wages. 

Property price caps have also been raised significantly. For example, Sydney’s limit increased from $950,000 to $1.3 million and Brisbane’s cap rose from $700,000 to $1 million. These adjustments better align with current market conditions across states and regions, ensuring the scheme caters to both urban and rural buyers. 

By expanding eligibility and tailoring price caps to regional differences, the government is taking practical steps to tackle housing affordability challenges. While supply issues remain a concern, these updates are a positive move towards helping more Australians achieve their homeownership goals. 

How the Help to Buy Scheme Works 

Let’s break down how this scheme could work for you. First, you’ll need a minimum 2% deposit. This low entry point could be a big help for many aspiring homeowners who have struggled to save up the traditional 20% deposit. 

Here’s where it gets exciting – the government will contribute with an equity share of up to 40% for new homes, or 30% for existing ones. This significantly reduces the amount you need to borrow, making your mortgage more manageable. However, this scheme is capped at 10,000 places each year over four years. 

And don’t worry – you’re not stuck with this arrangement forever. As your financial situation improves, you have the option to buy out the government’s stake over time. It’s a flexible system designed to give you a leg up without locking you into a permanent arrangement. 

Building More Homes

Modernising Construction 

The government isn’t just helping people buy homes; they’re also focused on building more of them. They’ve allocated $54 million to speed up the use of modern construction methods. This includes a big push towards prefabricated and modular home construction. 

Why does this matter? These modern methods can significantly speed up the building process, potentially leading to more homes being built faster and at a lower cost. It’s all about making construction more efficient. 

To support this, $49.3 million is being directed to state and territory support programs, and $4.7 million is designated to a national certification process. These measures aim to ensure that these new construction methods meet all necessary standards and regulations. 

Tackling Labour Shortages 

To build more homes, we need more skilled workers. The budget addresses this with the introduction of the Key Apprenticeship Program.  Aspiring tradies have reason to be optimistic, as the government is offering a $10,000 incentive for eligible apprentices in the trades sector.  

For employers, the Priority Hiring Incentive is being extended. This should encourage more businesses to take on apprentices and trainees, helping to build the skilled workforce needed to meet housing goals. 

Foreign Investors: A Temporary Ban 

What the Ban Means 

In a move that’s generated a lot of discussion, the government has announced a two-year ban on foreign investors buying established homes in Australia. This measure is set to start from next month. 

The ban doesn’t apply to investments that significantly increase housing supply or support its availability. The idea here is to focus foreign investment on creating new housing stock rather than competing for existing homes. 

To ensure this ban is properly enforced, the government is allocating $5.7 million to the Australian Taxation Office (ATO). They’ll be keeping a close eye on property transactions to make sure the rules are being followed. 

Cracking Down on Land Banking 

Along with the foreign buyer ban, the government is taking aim at land banking – the practice of holding onto vacant land without developing it. They’re giving the ATO an additional $8.9 million to investigate and address this issue, particularly when it involves foreign buyers. 

The goal is to ensure that land suitable for housing development doesn’t sit idle. By encouraging the productive use of vacant land, the government hopes to see more homes built and greater housing availability across the country. 

Other Budget Highlights 

Instant Asset Write-Off: Extended But Uncertain 

The instant asset write-off scheme, a popular tax incentive for small businesses, has been extended for another year, allowing eligible businesses to continue claiming deductions for assets under $20,000 until 30 June 2025. 

However, the future of the scheme looks uncertain. Without further legislation, the threshold will drop sharply to just $1,000 starting 1 July 2025. This change could significantly impact how small businesses manage depreciation for assets above this limit.  

Under simplified depreciation rules, assets valued at $20,000 or more will need to be placed into a depreciation pool instead of being immediately written off. These assets will then be depreciated at rates of 15% in the first year and 30% each year after that. While this approach still offers tax benefits, it spreads deductions over several years rather than providing an immediate financial boost. 

Energy Bill Relief 

While not directly related to housing, this budget measure will certainly be welcome news for homeowners and renters alike.  

The government is introducing a $150 quarterly rebate on electricity bills. This energy bill relief package comes with a cost of $1.8 billion, showing the government’s commitment to easing cost-of-living pressures. 

For many households, this rebate could make a significant difference, potentially freeing up funds for other expenses or savings – maybe even towards a home deposit. 

Key Takeaways 

• The 2025-26 Federal Budget allocates $33 billion to build 1.2 million new homes by 2029. 
• The Help to Buy scheme has been expanded, with increased funding and broader eligibility criteria. 
• First home buyers can access the scheme with just a 2% deposit, with the government providing up to 40% equity share. 
• $54 million is allocated to modernise construction methods, focusing on prefabricated and modular homes. 
• A new Key Apprenticeship Program offers $10,000 incentives for eligible tradie apprentices. 
• Foreign investors are banned from buying established homes for two years, with some exceptions. 
• The ATO receives additional funding to enforce the foreign buyer ban and tackle land banking. 
• A $150 quarterly rebate on electricity bills aims to provide cost-of-living relief.