First-home buyers were the clear housing winners from the 2025 federal budget, but the $800 million cash splash for first timers comes with a catch.
Treasurer Jim Chalmers has confirmed more than $850 million in housing spending to help first-home buyers and boost home building in this year’s budget.
While housing received less in the budget compared to last year, the Albanese government noted that it had spent $33 billion on housing since coming to power three years ago.
Cost of living has been the centre piece of the 2025 budget, splashing Aussies with tax cuts, energy bill relief, cheaper medicines, student debt cuts, and more.
Yet housing will continue to be a top tier issue for voters in the lead up to the next election amid high mortgage repayments, and rising home prices and rental costs.
Treasurer of Australia Jim Chalmers has delivered the 2025 federal budget. Picture: Tracey Nearmy/Getty
“We are tackling the housing shortage from every responsible angle, making home ownership more affordable for young Australians and young families in particular,” Dr Chalmers said in his budget speech.
Here’s a snapshot of what’s in the 2025 budget for first-home buyers, homeowners, renters and home builders.
First-home buyers
The government will invest a further $800 million into its Help to Buy shared equity scheme to expand the program, now set to cost $6.3 billion.
The extra funding will increase the income caps from $90,000 to $100,000 for individuals and from $120,000 to $160,000 for joint applicants and single parents.
It will also boost the property price caps to give first-home buyers more choice.
The scheme has been designed to help first-home buyers save for a home deposit faster and get onto the property ladder sooner.
Prime Minister Anthony Albanese and Dr Chalmers will be hoping the budget is an election winner. Picture: Tracey Nearmy/Getty
REA Group executive manager of economics Angus Moore said the new funding would make the scheme more accessible.
"The higher price thresholds will mean a lot more homes are eligible for the scheme than previously, and higher income bands will also expand availability to more first-time buyers than before,” he said.
However, the scheme isn’t running yet and first-home buyers will have to wait until later this year to access the scheme if the Albanese government is re-elected.
Home building
This year’s budget also had $54 million for the prefabricated and modular housing industry in a bid to boost home building.
The treasurer has allocated $49.3 million for state and territory governments to grow the prefabricated and modular housing industry, as well as $4.7 million for a voluntary national certification process to streamline offsite construction approvals.
Housing minister Clare O’Neil said making homes in factories instead of onsite could cut construction time in half.
Housing and cost of living have become top issues for voters across Australia. Picture: Getty
“We’ve got a big goal to build 1.2 million new homes in five years and to reach that we need to build homes in new ways – using methods like prefab we can build homes up to 50 percent faster,” she said.
It comes as home building approvals remain below average across the country and the home building industry struggles to build enough homes to meet the government’s five-year target of 1.2 million new homes.
Homeowners and renters
Homeowners and renters may have missed out on direct housing funds in this budget, but many households are set to benefit from the broad cost-of-living measures.
The cost-of-living measures will be relatively small but helpful to renters and homeowners who have seen mortgage and rental costs soar in recent years.
Every taxpayer will get two small tax cuts over the next two years, potentially pocketing hundreds of dollars each year.
The 16% tax rate for income between $18,201 and $45,000 will be cut to 15% from 1 July 2026, and then cut to 14% from 1 July 2027 – at a cost to the budget of $17.1 billion over the forward estimates.
Homebuyers continue to see home prices rise across most parts of Australia. Picture: Thomas Lisson
It means every taxpayer earning above $45,000 will get an extra tax cut of $268 next year and $536 in the following year.
Homeowners and renters will also receive energy bill relief, saving households $150 on their power bills through to the end of 2025, as part of a $1.8 billion energy rebate pledge.
On healthcare, the government has committed $8.5 billion to increase the number of bulk-billed GP visits available to Australians through bulk-billing incentives for GPs.
It will spend $689 million to cut the cost of all medicine listed on the Pharmaceutical Benefits Scheme to $25.
Renters and homeowners with student debts will also benefit from the government’s plan to wipe 20% off all student debts and lift the repayment threshold for graduates.
The new spending comes as the Albanese government recorded a $27.6 billion deficit this year, following two previous surpluses.
The government said the deficit was forecast to blow out to $42.1 billion next year.
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