Under the proposal, the Australian Government would establish an Australian Government housing trust (the Trust) outside the general government sector and provide $5 billion equity injection per year (indexed by CPI) into the Trust to fund the construction of public and affordable housing.

• the $5 billion equity funding from the Australian Government would be matched by the states and territories.
• Ownership of all housing would be retained by the Trust, with equity being equally split between the Australian Government and the state and territory governments.
• State and territory and local taxes such as stamp duty or land tax, would be waived.
• The Trust would be required to keep costs of land and construction consistent with costs reported in Social housing as infrastructure: an investment pathway by the Australian Housing and Urban Research Institute (the AHURI report), allowing for appropriate indexation.

Under this proposal, rent collected from eligible residents (less maintenance and management costs) would be re-invested to construct more housing.

The proposed housing profiles split by dwelling type and residents are outlined below.

• 50% of homes constructed would be public housing:
  • The profile of dwellings would be similar to existing state and territory owned public housing.
  • Residents eligible for public housing would have a median household income in the lowest quintile or households with government payments as main source of income.
  • Rents would be set at 25% of median household income for eligible residents.
• 50% of homes constructed would be affordable housing:
  • Affordable housing dwellings would be a mixture of 50% apartments, 25% semi-detached and 25% freestanding.
  • Residents eligible for affordable housing would have a median household income in the second quintile.
  • Rents would be set at 30% of median household income for eligible residents.

The request also sought additional information related to the proposal:
1) The number of public and affordable homes constructed each year over the period to 2032-33.
2) The number of additional homes that could be constructed using rental returns annually over the period to 2032-33.
3) The cumulative number of homes being constructed over the period to 2032-33.
4) The total amount of rental returns from public and affordable housing received each year over the period to 2032-33.

The proposal is ongoing and would be in effect from 1 July 2023.