Federal Budget 2025- How it impacts Homeownership and Housing Affordability

The 2025 Federal Budget has placed a strong emphasis on cost-of-living relief, with tax cuts, energy bill assistance, and student debt reductions. However, while housing has received less funding compared to last year, first-home buyers remain the biggest winners, benefiting from an $800 million expansion of the government’s Help to Buy scheme.

Boost for First-Home Buyers

The government has committed an additional $800 million to its Help to Buy shared equity scheme, increasing the total cost of the program to $6.3 billion. This initiative aims to make homeownership more accessible by allowing buyers to purchase a home with a smaller deposit while the government takes an equity stake in the property.

Key changes to the scheme:

Income caps increased:
Individuals: from $90,000 to $100,000

Joint applicants and single parents: from $120,000 to $160,000
Higher property price caps to give buyers more choice

The increased price thresholds and income caps would make the scheme more accessible to a broader range of buyers, however, the scheme is not yet open, and first-home buyers will have to wait until later this year for access—contingent on the Albanese government being re-elected.

Investment in Home Building

To address Australia’s housing shortage, the government is investing $54 million into prefabricated and modular housing. This includes:

$49.3 million for state and territory governments to support industry growth
$4.7 million for a voluntary national certification process to streamline offsite construction approvals

Housing Minister Clare O’Neil highlighted that prefabricated homes could be built up to 50% faster than traditional homes, helping to meet the government’s ambitious goal of 1.2 million new homes in five years.

Despite these efforts, home building approvals remain below average, and industry experts warn that supply challenges persist.

Cost-of-Living Support for Homeowners & Renters

Although direct housing assistance was limited, homeowners and renters will benefit from broader cost-of-living measures, including:

Tax Cuts

16% tax rate cut to 15% (2026), then 14% (2027)
Taxpayers earning above $45,000 will receive:
$268 tax cut in 2026

$536 tax cut in 2027

Energy Bill Relief

Households will receive $150 off power bills until the end of 2025
Part of a $1.8 billion energy rebate package

Healthcare & Student Debt Support

$8.5 billion boost for bulk-billed GP visits
$689 million to cut medicine costs to $25 per prescription
20% reduction on all student debts
Higher repayment threshold for graduates

Economic Outlook: A Growing Deficit

The budget comes as the Albanese government records a $27.6 billion deficit, with forecasts predicting it will increase to $42.1 billion next year.

While housing remains a top issue for voters amid rising home prices, mortgage repayments, and rental costs, the government has focused its spending on making homeownership slightly more accessible while offering modest relief for existing homeowners and renters.

As Australia moves closer to the next election, housing affordability will remain a major political battleground.