The 2023 federal budget – the second from the Albanese government – has been delivered.
It has likely left many investors wondering what sectors could benefit from government spending, and which might be dealt a blow.
Fortunately, it looks like it could be a good one for seven S&P/ASX 200 Index (ASX: XJO) property-related shares. That's according to UBS, anyway.
7 ASX 200 shares that could benefit from the 2023 budget: expert
The 2023 budget contains a few notable housing initiatives that could benefit ASX 200 property-related shares. Notably, a tax break for managed investment trusts behind build-to-rent projects, as well as expanded access to the home guarantee scheme.
Tax break for built-to-rent developers
The first change might offer some benefit to the likes of Mirvac Group (ASX: MGR) and Lendlease Group (ASX: LLC), UBS equity strategist Richard Schellbach envisages, as per The Australian.
The managed investment trust withholding tax rate attributed to new build-to-rent developments will be cut from 30% to 15% from 1 July 2024.
The capital works tax deduction rate, otherwise called depreciation, will also be lifted from 2.5% to 4% a year. That will increase the returns offered by new build-to-rent developments.
Building to rent is a relatively new concept in Australia. Indeed, Mirvac opened the first large-scale development in Sydney in 2020.
Expanded access to first home buyer scheme
Mirvac and fellow developer Stockland Corporation Ltd (ASX: SGP) are also capable of benefiting from changes to the first home guarantee scheme.
Schellbach also reportedly said ASX 200 building material providers CSR Limited (ASX: CSR) and Boral Limited (ASX: BLD) could be rewarded.
Finally, property advertising and media companies Domain Holdings Australia Ltd (ASX: DHG) and REA Group Ltd (ASX: REA) might also experience a boost on the back of the change, according to the analyst.
The first home guarantee sees the government backing a portion of a buyer's first mortgage. It, therefore, allows Australians to get their first foothold on the property ladder with as little as a 5% deposit.
Thanks to the 2023 budget, first-home buyers will be able to apply alongside friends or family. Previously, only spouses or de facto couples could jointly apply.
Australians who haven't owned property in the last decade will also be made eligible for the scheme.
