- May 30, 2022
- Posted by: Rogers Property Group
- Categories: Australia Home Owners, Australian Property Market, Latest News
Federal Labor has detailed its key housing policy for the election campaign, offering to help 10,000 households a year into home ownership by dramatically cutting the price of a property. With housing affordability a pressing issue this election, Labor came to the table with its shared equity scheme ‘Help to Buy’, where the government could take up to 40% equity in the home.
The homebuyer will not pay rent on the portion of their house owned by the government. Instead, the government, or the taxpayer, will recoup its money, plus its share of the capital gain, when the property is sold.
The scheme will be available to homebuyers with a taxable income of up to $90,000 for individuals and up to $120,000 for couples. Homebuyers must be Australian citizens and not currently own or have an interest in a residential dwelling.
Under the scheme the government will provide 40 per cent of the purchase price of a new home, and up to 30 per cent of the purchase price for an existing home. The homebuyer will need to have a deposit of 2 per cent and qualify for a standard home loan with a participating lender to finance the rest of the purchase.
The purchasers will not have to pay lenders’ mortgage insurance, and they can buy an additional stake in the home during the loan period if able to do so.
“This scheme is not just for first homebuyers, it’s for other Australians who need a helping hand as well,” Mr Albanese said.
Labor says the scheme could cut the cost of a mortgage by up to $380,000. The value of homes eligible under the scheme will be capped, based on the city and region.
If elected, Labor will also keep the Morrison government’s First Home Guarantee Scheme, which enables 50,000 homebuyers a year to purchase a new or existing home with a deposit as low as 5 per cent.
Mr Albanese has already promised a $10 billion, off-budget future fund to build 30,000 low-cost houses, including 10,000 affordable dwellings for frontline workers who cannot afford to live in the suburbs they service.