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The Prime Minister and the Opposition Leader have both unveiled major new policies to support first home buyers onto the property ladder.
On Sunday (13 April), both major political parties unveiled new housing policies on the campaign trail in Perth and Sydney, each promising to improve access to home ownership for first-time buyers should they win the upcoming federal election.
Labor to remove income and placement limits for the First Home Guarantee
Prime Minister Anthony Albanese revealed that, if re-elected on 3 May, the Labor Party would expand its home loan guarantee scheme by removing the placement and income limitations for first home buyers, instead opening it up to all first home buyers.
The new First Home Guarantee would therefore allow all first home buyers to purchase a property with a 5 per cent deposit – without paying lenders mortgage insurance – regardless of their income.
The Prime Minister said that the expanded scheme would also benefit from higher property price limits (details of the limits have not yet been revealed).
“We want more Australians to buy a home of their own sooner – with lower deposits,” he said.
“The median home price in Australia today is $820,000. Five per cent of that is $41,000. The last time $41,000 covered the 20 per cent deposit for a median home was 2002. That’s the generational scale of this change.
“This means a Sydneysider and first home buyer can purchase a $1 million apartment with a $50,000 deposit with their loan guaranteed by the Albanese Government.
“It means a Queenslander and first home buyer can purchase an $850,000 home with a $42,500 deposit.
“It means parents that feel compelled to loan money to their adult children to help buy a home can instead use that money for their own retirements.
“For the average first home buyer, this cuts the time to save for a deposit and saves tens of thousands of dollars on Lenders Mortgage Insurance.”
$10 billion for new homes
An Albanese Government would also invest $10 billion to partner with state developers and industry, to build up to 100,000 homes – with these homes reserved for sale only to first home buyers.
The new homes would be in addition to Labor’s broader Homes for Australia plan, which includes a $43 billion commitment to building 55,000 social and affordable homes – 28,000 of which are already under construction, according to the government.
Other moves announced by the Labor Party include a ban on foreign purchases of established dwellings from 1 April 2025 until 31 March 2027 and plans to clamp down and reduce land banking by foreign investors in an effort to ease pressure on the housing market.
Coalition promises to make mortgage interest deductible
Meanwhile, the Coalition has announced its new centrepiece housing policy, the First Home Buyer Mortgage Deductibility Scheme, which would allow first home buyers to claim a tax deduction on interest paid on the first $650,000 of their mortgage for newly built homes.
There is no cap on the overall mortgage size or home price.
The measure would be available for the first five years of the loan and targets individuals earning up to $175,000 and couples earning up to $250,000.
First home buyers will only qualify if they purchase a newly built home as their principal place of residence.
Opposition Leader Peter Dutton said that this would mean a first home buyer with a taxable income of $120,000 - and holding a $650,000 mortgage at 6.1 per cent - would receive a benefit of around $12,000 a year (dependant on individual circumstances including the size of a mortgage, interest rates, income, and other tax deductions).
“This policy is designed to make housing more accessible by reducing the cost of borrowing, improving loan serviceability, and helping buyers build equity faster.
“It provides a direct, tangible benefit in the early and most financially challenging years of home ownership,” he said.
The Liberal leader said that, by applying only to newly built homes, this policy would help boost construction activity, create jobs, and increase housing supply.
Expansion to guarantee scheme
As part of the same announcement, the Coalition also pledged to expand the Home Guarantee Scheme, which it first introduced when it was in power in 2020.
The expansion would lift income caps to $175,000 for individuals and $250,000 for joint applicants (currently $125,000 and $200,000, respectively), increase property price thresholds across all states, and remove caps on the number of places available under the First Home Buyer Guarantee and Regional First Home Buyer Guarantee.
The new property price caps would be as follows:
|
Region |
Current property |
New property |
|
NSW – capital city/regional centre |
$900,000 |
$1,500,000 |
|
NSW – other |
$750,000 |
$800,000 |
|
VIC capital city/regional centre |
$800,000 |
$950,000 |
|
VIC – other |
$650,000 |
$650,000 |
|
QLD – capital city/regional centre |
$700,000 |
$1,000,000 |
|
QLD – other |
$550,000 |
$700,000 |
|
WA – capital city |
$600,000 |
$850,000 |
|
WA – other |
$450,000 |
$600,000 |
|
SA – capital city |
$600,000 |
$900,000 |
|
SA – other |
$450,000 |
$500,000 |
|
TAS – capital city |
$600,000 |
$700,000 |
|
TAS – other |
$450,000 |
$550,000 |
|
ACT |
$750,000 |
$1,000,000 |
|
NT |
$600,000 |
$600,000 |
The Coalition’s broader housing platform also includes a Super Home Buyer Scheme, which would allow people to access up to $50,000 of their superannuation for a home deposit, and a $5 billion Housing Infrastructure Programme to support new builds by funding roads, water, and other services.
Additionally, Dutton has committed to reducing migration levels, placing a two-year ban on foreign investors and a reduction in migration numbers, and working with financial regulators to change lending rules to help young Australians access a mortgage (including reducing the ‘overly cautious’ serviceability buffer).
[Related: Housing issues grow in importance for voters as election looms]
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