Inside Labor’s $11B Plan to Fix Housing

In the 2025–26 Federal Budget, the Australian Labor Government has unveiled a comprehensive housing strategy aimed at addressing affordability, boosting supply, and supporting vulnerable populations. This plan encompasses a range of initiatives designed to make homeownership more attainable, expand social and affordable housing, and provide assistance to renters and those experiencing homelessness.

Building More Homes for Australians

Central to the government’s housing agenda is the National Housing Accord, which sets an ambitious target of constructing 1.2 million new, well-located homes over five years. In the first quarter alone, nearly 45,000 new homes were completed, with the pace expected to accelerate as initiatives take effect.

To support this goal, the government is investing:

• $1.5 billion through the Housing Support Program to fund projects that improve planning capabilities, deliver essential infrastructure (such as roads, water, and power), and build more social housing.
• $3 billion in incentive payments under the New Homes Bonus, encouraging states and territories to address infrastructure backlogs and deliver new housing.
• $54 million to accelerate the adoption of modern construction methods, enhancing efficiency and reducing building times.
• $120 million from the National Productivity Fund to incentivize the removal of red tape hindering modern construction techniques.

Additionally, the government is collaborating with states and territories on the National Planning Reform Blueprint to streamline planning processes and expedite home construction.

Expanding the ‘Help to Buy’ Scheme

The ‘Help to Buy’ program is being expanded with an $800 million investment to increase property price and income caps, making it more accessible to a broader range of Australians.

Under this scheme, the government provides an equity contribution of up to 40%, enabling eligible homebuyers to purchase homes with lower deposits and smaller mortgages. This expansion aims to assist around 40,000 households in achieving homeownership.

Banning Foreign Purchases of Existing Homes

To prioritize housing availability for Australians, the government will implement a two-year ban, starting 1 April 2025, on foreign buyers purchasing existing dwellings. To enforce this ban, the Australian Taxation Office (ATO) will receive $5.7 million.

An additional $8.9 million will be allocated to the ATO and Treasury to address land banking by foreign buyers and ensure that vacant land is utilized productively within a reasonable timeframe.

Enhancing Social and Affordable Housing

The government is committing $9.3 billion to states and territories to:

• Combat homelessness
• Provide crisis support
• Maintain and repair social housing

This includes doubling funding for homelessness services to approximately $400 million per year. An additional $6.2 million is allocated for homelessness research, advocacy, and coordination.

Furthermore, $1 billion will be provided to the National Housing Infrastructure Facility (NHIF) to support crisis and transitional accommodation for women and children experiencing domestic violence, as well as for youth at risk of homelessness.

Supporting Renters

To alleviate rental pressures, the government has increased the maximum rates of Commonwealth Rent Assistance by 45%, benefiting around 1 million households.

This marks the first consecutive annual increase in over 30 years, reflecting the government’s commitment to providing cost-of-living relief to renters.

Boosting the Construction Workforce

Addressing labor shortages in the housing construction sector, the government will offer eligible apprentices up to $10,000 in financial incentives over the course of their apprenticeships, starting 1 July 2025.

This initiative aims to attract more individuals to the construction trades, ensuring a skilled workforce capable of meeting the nation’s ambitious housing targets.

For more detailed information on these initiatives and other aspects of the 2025–26 Federal Budget, visit the official Budget website.