The Treasury has announced the government will provide $10 billion over eight years to enable first home buyers to get into housing sooner.
The Albanese government has released its Mid‑Year Economic and Fiscal Outlook (MYEFO), revealing that it is pledging an additional $10.0 billion to support states, territories, and industry to deliver up to 100,000 new, well‑located dwellings for sale to first home buyers.
The First Home Supply Program will see the government partner with states and territories and industry to unlock more housing supply and “make it easier for first home buyers to own a home of their own”.
The money, which will come over eight years from 2026–27, includes $2.0 billion in grants and $8 billion in concessional loans (expected to be either zero-interest loans or equity investments
primarily to states and territories) to deliver up to 100,000 homes reserved for first home buyers.
State governments will also provide $2 billion in matched funding to get homes underway.
The government has said it will work with states and territories and industry to identify land that is vacant or underutilised.
Construction on the first homes will start in 2026–27, with first home buyers to begin moving in from 2027−28.
The government also said it would put forward $15.0 million in 2025–26 to improve awareness and accessibility of information on Australian government supports for first home buyers.
The Treasury said it would partially meet the cost of this measure from within existing resources.
The investments build on the existing home buying programs currently in market to help progress towards the government’s target of building 1.2 million new homes by June 2029.
The existing support includes the expanded 5 per cent Deposit Scheme (formerly the Home Guarantee Scheme), which is estimated to cost $5.4 million over four years from 2025–26.
Since the 5 per cent Deposit Scheme was expanded, it has reportedly supported more than 21,000 people into home ownership (and more than 200,000 since May 2022).
Tax cuts
The Treasurer also confirmed that the government would deliver two more rounds of tax cuts for every taxpayer next year and the year after.
As announced in March, these add to the first round of tax cuts that commenced on 1 July 2024.
Under these changes, from 1 July 2026, the 16 per cent tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15 per cent.
From 1 July 2027, this tax rate will be reduced further to 14 per cent.
“These tax cuts will provide further cost-of-living relief and return bracket creep by lowering average tax rates for all taxpayers, especially for low- and middle-income earners,” the MYEFO document states.
“The tax cuts will also boost labour supply, particularly from women and lower-income Australians.”
Combined with the first round of tax cuts, the average annual tax cut is expected to be $2,548 in 2027–28, around $50 per week, compared to 2023–24 tax settings.
Other measures announced include:
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$1.1 billion for more free mental health services and additional training places.
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$435 million to help low‑income workers through the boost to the Low Income Superannuation Tax Offset.
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An extra $233 million in funding for the CSIRO.
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$98 million to fast-track the qualification of 6,000 tradies and establish a new National Training Centre in New Energy Skills.
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$1.1 billion for the Cleaner Fuels Program, among other measures supporting the government’s Net Zero Plan.
In a joint statement with Finance Minister Katy Gallagher, Treasurer Jim Chalmers said: “Labor’s economic plan is all about helping with the cost of living at the same time as we build a more productive and resilient economy and a more sustainable budget, and the mid‑year update advances this plan…
“The Mid‑Year Economic and Fiscal Outlook strengthens the budget, reduces debt and continues the Government’s responsible approach to economic and fiscal management,” they said and outlined that this is “the only mid‑year update on record that has delivered a better bottom line every year of the forward estimates, less debt in every year of the forward estimates and net policy decisions that improve the bottom line”.
The 2025–26 MYEFO shows that the budget deficit is $36.8 billion, $5.4 billion lower than the 2025 Pre-election Economic and Fiscal Outlook (PEFO) and $6 billion lower than “inherited” from the Morrison government.
The budget bottom line is cumulatively $8.4 billion better than the 2025 PEFO across the forward estimates, gross debt is forecast to be $993 billion by the end of this financial year ($29 billion lower than expected at the 2025 PEFO), and gross debt is forecast to peak at 37.0 per cent of GDP, the same as the 2025 PEFO.
The government said this progress has been achieved despite $35 billion in unavoidable spending pressures, through positive net policy decisions, $114.1 billion in savings and reprioritisations, and restrained real spending growth averaging 1.7 per cent to 2028–29.
[Related: Housing features prominently in federal budget]
