Australians will head to the polls on May 3, and with housing affordability shaping up as a key election issue, we unpack how the two major parties are pledging to help first home buyers.
Housing affordability has reached boiling point.
Both Labor and the Coalition agree on this.
But they’re offering different solutions for first home buyers.
As polling day approaches, we break down what’s up for grabs as the major parties face off on support for first home buyers.
First up, the incumbent: Labor
It’s estimated that housing demand could exceed supply to the tune of 163,400 dwellings between now and 2032.
Labor is pledging to invest $10 billion towards building up to 100,000 homes exclusively for first home buyers.
Labor is also promising to make it easier for first home buyers to get into the market by expanding the First Home Guarantee scheme.
This would allow more first home buyers to purchase a home with just a 5% deposit and zero lenders mortgage insurance (which can be a big saving for first home buyers).
At present, first home buyers face income limits to be eligible for the 5% deposit scheme.
Labor is pledging to scrap the income limits so that all first home buyers would be eligible, regardless of income.
There would still be caps on the maximum price you could pay for a home under the scheme, but the price limits would be increased if Labor is re-elected.
Labor has also promised to expand eligibility for its Help to Buy scheme – where the government would cover up to 40% of a home’s cost that first home buyers can buy out at a later date.
The Coalition – a tax break for home loan interest
The Coalition is pledging to introduce a new First Home Buyer Mortgage Deductibility scheme.
This would allow first home buyers to claim their home loan interest as a tax deduction.
There are strings attached.
You would need to buy or build a brand new home, and you could only claim a deduction on the interest that applied to the first $650,000 of your home loan – and only for the first five years.
The proposed scheme would only be available to individuals earning up to $175,000 annually, or up to $250,000 for joint buyers.
Like Labor, the Coalition is also planning to fine-tune the 5% deposit First Home Guarantee scheme.
If elected, it promises to increase the income limit for buyers to be eligible for the scheme while also raising the property price limits.
In addition, there would be no maximum limit on the number of first home buyers who could access the scheme each year.
The Coalition is also promising to allow first home buyers to use up to $50,000 of their superannuation to buy a home.
Under the policy, the $50,000 would need to be returned to the superannuation account when the house that was purchased using the super funds was sold.
Want to know more?
Buying a first home can be daunting.
So it’s good to know you can rely on our support no matter who wins the federal election on May 3.
Contact us today to learn more about the home buying process, and discover the range of first home buyer incentives that you may be eligible for right now.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
