AFTER setting his sight on first home buyers last month, Labor Opposition Leader Kevin Rudd is proposing to setup a new $603 million scheme to make rents more affordable.
The latest election promise follows Rudd’s announcement of a $500 million housing affordability fund last month.
The proposed scheme will run in conjunction with the states and territories, which will offer investors $2,000 in either direct financial support or through cost saving measures, such as reduced stamp duty or charges.
It is hoped that the policy, which will deliver tax incentives and financial support to investors – will sign up to the program to build rental properties.
Investors will receive an annual $6,000 tax incentive over 10 years to construct homes for the rental market.
Rudd said the new scheme will cut rents by 20% for low to middle income families by creating 50,000 new, more affordable homes.
The tax relief will only be available to institutional investors who build homes to be rented to eligible families at 20% less than the average market rent.
Rudd estimates savings of $50 a week for people paying market rent of $250 a week up to $90 per week for those forking out $450 a week to keep a roof over their head. Labor estimates the program will cost $603 million in its first five years of operation.
Families on the Family Tax Benefit A and the maximum Commonwealth rent assistance will be eligible for the lower cost rental homes. Aged pensioners and other welfare recipients are also eligible.
To qualify, the tenants must prove they have been spending at least 30% of their gross household income on rent for at least 12 months.
Australian Property Journal
