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What is Labor doing for first home buyers?
The ground-shaking 2022 federal election saw Anthony Albanese sworn in as the Prime Minister and a majority Labor government now in charge.
With a new government comes change, and the real estate sector is not missing out.
One of the most significant changes the Labor government has promised will impact some eligible first home buyers and hopefully make owning a home a more realistic prospect.
Here’s a breakdown of the homebuyer incentives Prime Minister Albanese and his party have on their agenda.
- Help to Buy
The Labor government’s major scheme is the Help to Buy scheme.
The scheme is a ‘shared equity’ arrangement, which means that the government will chip in up to 40% of the price of a new home and up to 30% on an existing property.
At this stage, up to 10,000 eligible Australians will be granted access to this scheme each year. Along with the government’s contribution towards the home price, eligible applicants will also only need as little as a 2% deposit. They will also save on Lender’s Mortgage Insurance.
For those wary of co-owning a home with a federal superpower, there is even a buy-back clause that will allow homeowners to pay off the government’s share of their property over time. There are also price caps on the properties purchased through the scheme, which differ from state to state.
To be eligible, you must:
- Be an Australian citizen over the age of 18
- Earn less than $90,000 a year as an individual or less than $120,000 as a couple
- Make the property you buy your primary residence
- Not own any other land or property (in Australia or overseas)
- Have at least a 2% deposit saved
- Be able to cover additional costs like stamp duty and other fees
Be aware that if your income increases past a certain threshold, you will be expected to start repaying the government for their share in the property.
You can find out more by visiting the Labor website, and by speaking with a lending specialist (either a mortgage broker or the bank).
- Regional first home buyer scheme
Labor will also be implementing a regional version of the Help to Buy scheme.
Available for up to 10,000 Australians living outside the capital cities, the scheme will cover up to 15% of the purchase price. Successful applicants will only need a 5% deposit and will enjoy the same Lender Insurance reductions as the Help to Buy scheme.
If you’re a regional dweller or hope to become one, you’ll find more information here.
- The Housing Australia Future Fund
The Housing Australia Future Fund is in its infancy, but some details are already emerging.
The $10 billion plan is intended to help all Australians to have a roof over their heads.
Labor plans to build 30,000 affordable housing properties over the next five years.
They are promising:
- 20,000 social housing properties
- 10,000 affordable homes for the frontline workers
The social housing properties will be aimed at women and children escaping domestic violence and older women with low incomes.
The frontline worker homes will be for police officers, nurses, cleaners and other frontline workers, enabling them to live closer to their jobs. This will improve life for these workers and make for better services for all Australians.
Are you eligible?
Reach out to your broker or bank to find out more about these schemes then connect with a real estate agent to find a home that meets the criteria.
