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The federal government has set a timeline to launch its shared equity home buying scheme, which was a key Labor Party election promise in 2022.
The scheme, called “Help to Buy”, will kick off in 2024, so long as the requisite legislation passes in each state and territory, which leaders agreed to do during the latest meeting of the national cabinet.
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With 40,000 places available, the program will see the government provide an equity contribution to eligible participants of up to 40 per cent for new homes and 30 per cent for existing homes.
The buyer won’t need to pay rent on the share owned by the government, but they may need to pay a corresponding share of any capital gains earned on the property once it is sold.
There will be caps on the purchase price of the house depending on the location and factors determining eligibility, such as the maximum salary allowed for an individual and couple and the purchaser cannot own any other property, though it does not have to be their first home.
In moving forward with these plans, Prime Minister Anthony Albanese spoke to the difficulty facing many Australians in getting onto the property ladder.
“So often these Australians have done all the right things – worked hard, saved up, made sacrifices, but a deposit for a home is still out of reach,” Mr Albanese said.
“Our government will step up and assist, opening the door of home ownership to tens of thousands of Australians.”
Housing Minister Julie Collins added that this program is “a critical element of our government’s broad and ambitious housing agenda to help address Australia’s housing challenges”.
“We’ll keep delivering to ensure more Australians have a safe and affordable place to call home,” she added.
In addition, the Prime Minister announced during the national cabinet meeting “an ambitious new national target” to build 1.2 million “well-located” homes over the next five years from 1 July 2024.
“This is an additional 200,000 new homes above the National Housing Accord target agreed by states and territories last year,” Mr Albanese said.
The Commonwealth is set to inject $3 billion in performance-based funding; the New Home Bonus is an incentive for states and territories that surpass their share of the 1 million well-located home target established under the National Housing Accord.
“This will incentivise states and territories to undertake the reforms necessary to boost housing supply and increase housing affordability, making a positive and practical difference for Australians planning to buy a home,” Mr Albanese said.
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