A comprehensive housing affordability plan was announced as part of the 2017-18 Budget to improve outcomes across the housing spectrum. The Government’s plan for housing affordability includes measures to unlock supply, create the right incentives and improve outcomes for those most in need.
Measures to boost the supply of housing include providing $1 billion through the National Housing Infrastructure Facility to fund critical infrastructure that will speed up the supply of housing, releasing suitable Commonwealth land for housing development and specifying housing supply targets in a new National Housing and Homelessness Agreement (NHHA) with the States and Territories.
Other reforms are designed to create the right incentives to improve housing outcomes by helping first home buyers save a deposit through voluntary contributions into superannuation, including through salary sacrificing, reducing barriers to downsizing to free up larger homes, improving the integrity of capital gains rules for foreign investors, better targeting of housing tax concessions and reforming foreign investment rules to discourage investors from leaving their property vacant.
Further reforms will focus on improving outcomes in social housing and homelessness by providing $375 million to make homelessness funding permanent and give funding certainty to providers of homelessness services under the NHHA, establishing a National Housing Finance and Investment Corporation to operate an affordable housing bond aggregator and providing tax incentives to increase private investment in affordable housing.
National Housing Finance and Investment Corporation
The Government will establish the National Housing Finance and Investment Corporation (NHFIC) by 1 July 2018 to operate an affordable housing bond aggregator to provide long term, low cost finance for affordable housing providers. This will support greater private and institutional investment to expand the community housing sector and provide more Australians with access to affordable rental housing.
The NHFIC will also administer the $1 billion National Housing Infrastructure Facility (the Facility). The Facility will help local governments fund the high costs of building critical infrastructure such as roads and water networks to support the supply of new housing. The $1 billion NHIF will provide local governments the opportunity to access up to: $600 million in concessional loans; $225 million in equity investments; and $175 million in grants. Payments will be made to local governments through State and Territory governments.
National Housing and Homelessness Agreement
The Government is introducing a new National Housing and Homelessness Agreement (NHHA) with States and Territories to increase the supply of new homes and improve outcomes for all Australians, particularly those most in need. Under the agreement, the Government will maintain the Commonwealth’s current funding of over $1.3 billion a year provided under the National Affordable Housing Specific Purpose Payment with a requirement for concrete outcomes to build more homes and ensure improved housing outcomes across the housing spectrum. The NHHA will also provide an additional $375.3 million of funding over three years from 2018 19. This funding will be permanent and indexed to provide certainty to front line services that help Australians who are homeless or at risk of becoming homeless.