The Federal Government's May budget attempted to walk a tightrope between providing cost of living relief without exacerbating inflation.

The main winners were low and middle income earners.

Commentators are divided on the inflationary effect of the budget, but welcomed an historic $4 billion surplus for 2022-23.

But what changes did the budget hold for the property sector?

As the cost of renting across Australia continues to escalate, the government announced a 15 per cent maximum increase for Commonwealth Rent Assistance of between $15.73 and $31.76 a fortnight from September.

Director of KR Peters Peter Nicolls said the rent assistance boost, set to cost the budget $2.7 billion, will be welcomed by low-income renters.

"The rental market is incredibly tight and this measure will help those at the lower end of the rental market," he said.

Renters are going to need every cent they can get. If what is happening in Port Douglas is any indication, people will be living in tents if the affordability problem gets any worse.

However, Mr Nicolls said he is concerned the rent assistance boost could be inflationary.

"When you're giving money to people who will spend it, there is no way that is going to help bring down inflation."

Mr Nicolls said some landlords are getting "greedy" in their pursuit of higher rents regularly calling property managers asking when they can next increase the rent on their investment properties.

He said some landlords were even considering selling and investing their money in a term deposit, rather than keep an investment property and face escalating interest bills, land tax and rates.

To help develop the build to rent sector the government announced changes to taxation treatments including increasing the rate for the capital works tax deduction to 4 per cent per year and reducing the final withholding tax rate on eligible fund payments from managed investment trust investments from 30 per cent to 15 per cent.

This measure will apply to build to rent projects consisting of 50 or more apartments or dwellings made available for rent to the general public.

The government hopes these measures will encourage investment and construction in the build to rent sector and expand Australia's housing stock.

Mr Nicolls welcomed the tax changes saying the move will incentivise major developers to increase the stock of apartments available for lease.

"Build to rent also gives renters greater certainly because the lease term for each apartment must be a minimum of three years," he explained.

The government announced an additional $2 billion to increase the National Housing Finance and Investment Corporation’s (NHFIC) liability cap from $5.5 billion to $7.5 billion from 1 July, which will enable the NHFIC to support more social and affordable rental homes through lower cost loans to community housing providers. 

The government continues to negotiate legislation for its Housing Australia Future Fund through the Senate. If successful, the government predicts the fund will finance the construction of 30,000 new social and affordable homes in its first five years.

A plan to expand the eligibility criteria for the First Home Guarantee, and the Regional First Home Buyer Guarantee was announced in the weeks before the budget. 

The schemes have previously only been available to singles and married or de facto partners, but now includes friends, siblings, and other family members, meaning they will be eligible for joint applications from July 1, 2023. 

The guarantees will also be expanded to buyers who haven’t owned a property in Australia in the past 10 years, supporting those who have fallen out of homeownership, now also including permanent residents. 

The Family Home Guarantee will also be expanded to be available to eligible borrowers who are single legal guardians of children such as an aunt, uncle or grandparent, in addition to single natural and adoptive parents. 

Mr Nicolls said expanding these schemes will help people who have faced misfortune like a marriage break-up to "have another crack" if they haven't bought in the past 10 years.

"It's a very considerate offer by the government," Mr Nicolls said, adding that he doesn't believe the measure will affected property prices.

Mr Nicolls noted there were no changes in the budget to Capital Gains Tax, negative gearing  or the Stage 3 Tax cuts.

In his budget speech Treasurer Jim Chalmers said Australia can do better on housing.

"Our country can do better than that – and our government will," Mr Chalmers said.

"With the Help to Buy Scheme – allowing up to 40,000 eligible Australians to own their own home with a lower deposit and smaller mortgage.

"With the Regional First Home Buyer Guarantee – supporting another 10,000 new homeowners each year.

"And by helping more older Australians downsize to a suitable home which will free up housing stock for younger families."