Component 1 would establish a Federal Housing Trust (the Trust) to construct and manage dwellings in partnership with states, territories and community housing providers.

The Trust would be established outside the general government sector and would be allowed to make a profit. All funding from the Australian Government would be provided in the form of equity.

• Over 20 years, the Trust would construct 1,000,000 new environmentally sustainable residential dwellings which adhere to Universal Design Principles to be operated by the Commonwealth, partner states, territories and housing providers.
  • The Trust would be required to construct dwellings at an average cost of $300,000 each in 2022-23, indexed in line with growth in land and construction costs.
• 875,000 of the dwellings would be residential tenancies:
  • 750,000 dwellings constructed by the Trust would be allocated for rent by low-income households.
  • The remaining 125,000 rentals would be universal access rentals.
  • Tenants in Trust homes pay the lower of 25 per cent of their income or market rent.
  • Rental income from Trust homes would first go to the operator to cover operating costs. Anything in excess of operating costs is split 2:1 between the Commonwealth and States and Territories.
• 125,000 dwellings would be part of a Shared Equity Ownership Scheme (SEOS).
  • 50-75 per cent of the equity in each of these dwellings would be sold to the occupant.
  • With a 10 per cent deposit, participants in the Scheme can access a loan from the Commonwealth at the government bond rate.
  • States and Territories would waive the stamp duty, if applicable.
  • Each home owner in the Scheme would pay a share of the operating costs proportionate to their equity stake.
  • Sales of the equity stake by owners would be limited to the Trust as sole purchaser. The purchase price would be set at a fair rate based on the national average dwelling price rise during the life of the share equity arrangement, capped at 7.5 per cent per annum price increase on a cumulative basis.
  • Tenants in the Trust’s rental tenancies would have the option of purchasing their dwelling through the SEOS.
• The Commonwealth would provide two‐thirds of the required funding per dwelling. State and Territory governments would provide the remaining third. Contributions from State and Territory governments could include provisions of land, either as free title or leasehold.

Component 2 would establish a capital grants fund to provide State and Territory governments with $1.5 billion each year for three years, and then $2.5 billion divided evenly over the next 7 years, for public housing improvements and construction.

Both components would start from 1 July 2022.