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Date Published : Tuesday, March 04, 2008
Prime minister Kevin Rudd has moved to ease the affordability crisis in the Australian rental market by doubling a tax incentives scheme for property investors.
In the run up to last year's federal election, the Labor party created the National Rental Affordability Scheme, which gives property investors tax breaks if they pledge to build up to 50,000 new homes for low-cost renting purposes.
Since entering power in November, the scheme has been launched interstate in a bid to ease the financial worries of many Australians.
However, as a result of a poll by the Housing Industry Association, which showed that up to one million Australians are struggling with stress due to rent issues, the number of properties to be built across the nation will be doubled to 100,000.
Currently, many of those who cannot afford to take out a home loan are also struggling with rising inflation and higher rental prices.
Mr Rudd also announced that an extra $30 million will be allocated to streamline the rental process.
Announcing the plans, Mr Rudd said: "This doubling of the number of affordable rental properties to be built under the scheme reflects the severity of the housing affordability problem in Australia."
States and territories have agreed to provide $2,000 per home either through cash payments or in kind, such as via the provision of cut price land or concessions on stamp duty.
The initiative would mean, for example, that rent on a new average three-bedroom unit would fall for $350 a week to $280 a week - a $70 saving.
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