Labor’s housing plan explained: Can you get 40% of your new home’s price?
Around 10,000 homebuyers could be eligible for a proposed housing policy that would see the Labor government cover up to 40% of a property's purchase price.
Anthony Albanese's federal Labor party announced its key housing policy for the election campaign on Sunday 1 May, a few weeks ahead of the federal election on 21 May.
Key details of the shared equity policy are:
- The government will cover a homebuyer's loan for 30% of the cost of an existing property.
- If the property is a new home, they'll cover 40% of the purchase price.
- 10,000 spots will be made available per year.
- Those earning below $90,000 annually or couples earning below $120,000 annually are eligible.
Under the "shared-equity" arrangement, you would be essentially co-buying the property with the government.
You would become eligible to buy the 30–40% portion over time.
Who is eligible?
The scheme is not restricted to first home buyers, with Labor confirming it would be available for anyone who does not currently own a property.
You'd need a deposit worth at least 2% of the purchase price, and no lender's mortgage insurance is payable.
You must be earning less than the income thresholds listed above.
Does this mean you co-own the property with the government?
Details of the policy are light so far, but this seems to be the case. You essentially buy 60–70% of the home, and the government buys the other 30–40%.
Once you own the property, after 2 years if your income has increased, you would be required to start purchasing more of the property.
Labor estimates the scheme would cost $329 million over 4 years, but some experts are already saying the investment could be much higher than that, with Greens leader Adam Bandt saying this figure "won't even touch the sides".
More details are expected over the coming days as Labor fleshes out the details of their proposed scheme, which is designed to help with housing affordability – but could actually serve to fuel demand and drive prices higher.