Budget 2025: What the Housing Tax Reforms Mean for You
The Albanese Government's 2025 Budget targets housing affordability with tax system changes. Here's what PAYG employees need to know. Read the plain-English breakdown.
The Federal Budget handed down in May 2025 includes a package of housing measures the Government says will help 75,000 Australians into homeownership over the next decade, according to the Treasury Ministers release [Source 1]. The headline moves: reforms to make the tax system "fairer" for first home buyers, combined with a push to lift housing supply and measures designed to prioritise owner-occupiers over foreign investors.
For most PAYG employees, the immediate question is simple: does any of this actually help me? The honest answer is that the tax changes are structural and long-run — they won't unlock your deposit by next weekend. But they do signal the Government is actively reshaping incentives in the housing market, and that backdrop matters if you're thinking about how to structure your finances right now.
What this means for novated lease customers
At first glance, a housing announcement and a novated lease feel like two different conversations. They're not. A novated lease reduces your taxable income, which can meaningfully affect your borrowing capacity calculations and the net cost of running a vehicle while you're saving for a deposit. For employees who are already stretched between rent, living costs and trying to accumulate a deposit, keeping more of each pay cheque in your pocket — rather than surrendering it to income tax — is a lever worth understanding.
The Budget's broader framing — that the tax system should be fairer for everyday Australians trying to get ahead — is also the exact framing that makes salary packaging worth a second look. The same instinct that has the Government adjusting housing tax settings is the one that keeps the novated lease FBT exemption for eligible electric vehicles on the books. These things aren't unrelated.
None of this replaces a conversation with your accountant or mortgage broker about your specific position. But if you haven't modelled the potential savings from a novated lease alongside your home-buying timeline, it's worth doing.
Common questions
Does this Budget change how novated leases are taxed?
The Budget measures announced in this release [Source 1] focus on housing — not on FBT or salary packaging rules. There are no changes to the novated lease framework in this announcement. The EV FBT exemption remains in place as legislated.
Can a novated lease improve my borrowing capacity for a home loan?
Potentially, yes — but it depends on your lender and how they assess salary-packaged income. Some lenders gross up your income for assessment purposes; others apply different policies. You'd need to check with your specific lender or mortgage broker.
Why is millarX covering a housing Budget story?
Because our customers are PAYG employees trying to get ahead financially, and the Budget affects that picture. A novated lease is one tool in that toolkit — we want you to understand the full context, not just the bits that sell leases.
What does 'making the tax system fairer' actually mean in this Budget?
According to the Treasury Ministers release [Source 1], the reforms are aimed at helping approximately 75,000 Australians into homeownership over the next decade, with measures focused on first home buyers and limiting advantages for foreign investors. Specific legislative detail should be confirmed via the Budget papers directly.
Is the EV novated lease exemption still available?
Yes. The FBT exemption for eligible electric vehicles under a novated lease remains in place and was not altered by this Budget announcement. millarX is ACL-licensed (569484) and AFCA-registered — we'll flag immediately if that changes.