How much of the house tax relief you’ll get?
The Government’s plan to claw back some of the tax concessions it has made to high-income earners could add $3 billion to the deficit over a decade.
House prices have risen more than 20 per cent in real terms since 2009, prompting warnings from economists that the Government will face the most difficult economic times since the Great Depression.
The Budget will set out a plan to cut the top rate of tax from 30 per cent to 25 per cent over 10 years, and cut tax concessions for investors and small businesses.
A House of Representatives committee is examining the impact on housing affordability, but experts warn the Government should not try to address the issue in a budget before the end of the year.
“The Budget has a lot of really good stuff, but it doesn’t go as far as you might hope,” said Richard White, chief economist at the Australian National University.
But there is plenty of money to clawback from high-tax households, and some of it could go towards housing affordability.
Prime Minister Tony Abbott has promised to give Australians a rebate on the cost of new houses over the next five years.
He will also offer an $800,000 mortgage insurance rebate to households who buy new houses for $100,000.
It is unclear how much of that money would be allocated to housing affordability in the Budget, but the Government’s first priority is to help low-income families get back on their feet.