The Rudd government will offer corporate investors a tax credit of $6,000 per dwelling to entice superannuation funds to invest in affordable housing according to a report by the Australian Financial Review.
Under the plan, the government will allocate 3,500 tax credits costing about $21 million in its budget for 2008-09 as a part of the National Rental Affordability Scheme, the report said. In addition, states will provide a $2,000 per dwelling in cash or in kind assistance to encourage developers and investors to build 50,000 new properties for rent at 20% below market rates over the next five years the newspaper said.
States are also mulling releasing land, providing cash and cutting stamp duty or infrastructure charges to further entice new developments in the housing markets it said.
"It opens up a whole new class of investment in residential real estate and I hope over time it will become an important new area for the supply of affordable rental accommodation," the report said quoting Federal Housing Minister Tanya Plibersek.
Affordability levels in Australia have deteriorated by 2.2% over the last three months to December 2007 according to REIA. Borrowers now need 37.4% of the family income to meet average mortgage repayments - the highest level reached in 22 years that REIA has tracked affordability data. Renters are not immune with 24.8% of the income going towards rent.
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