Incentives in Australia for affordable home builders

Housing plan will offer more affordability to Australian housing market.

Tanya Plibersek, the Housing Minister for Australia, recently announced plans to help provide subsidise to the construction of some 50,000 rental properties in the next four years.

The investment opportunity allows for investors to receive up to A $6000 tax credit for building property that is more affordable. While the program will slowly start to curb any problems with inflation, the government sees this as a method of encouraging the improvement of affordable homes within the country.

According to information released by the Real Estate Institute of Australia, home loan repayment rose to 37.4% of an average family's income during the final quarter of last year. Additionally, the affordability of properties here dropped by 2.2% for that same quarter and a total of 6.3% for the full year of 2007.

The Australian government will provide 35000 credits to corporate investors from now until the end of June 2009. It will cost the government about A $21 million, but with a positive view by working to improve the overall affordability of the country, it is only a part of the A $603 million National Rental Affordability Scheme to be put in place.

Investors will receive a tax credit to the tune of A $6000 per dwelling which is to encourage pension funds for affordable housing. Another A $2000 Per dwelling will be put in place for the construction of 50,000 new properties for rent. Those properties will need to be at 20% below the market rates for the coming years.