In the run up to the election, the Labor government made several election promises to help address some of Australia’s housing issues. While many of these pledges affect mainly homeowners, some do affect investors.

Here we take a look at some of its pledges:

Help to Buy

Anthony Albanese pledged that a Labor government would help more people get into the housing market sooner by cutting the cost of buying a home by up to 40 % under its Help to Buy scheme.

This will mean a smaller deposit, a smaller mortgage and smaller mortgage repayments.

Help to Buy will be open to 10,000 Australians each financial year.

Eligible home buyers will need a minimum deposit of 2 %, with an equity contribution from the Federal Government of up to a maximum of 40 % of the purchase price of a new home and up to a maximum of 30 % of the purchase price for an existing home.

Buyers will still need to fund transactional costs, such as stamp duties, legal costs and bank fees.

More details and eligibility can be found here.

National Housing Supply and Affordability Council 

With the aim of increasing housing supply and improving housing affordability, Labor has pledged to establish a National Housing Supply and Affordability Council.

The Council will be advised by experts from a diverse range of relevant fields including finance, economics, urban development, residential construction, urban planning and social housing sectors.

Labor’s National Housing Supply and Affordability Council will:

• Set targets for land supply in consultation with State and Territory Governments.
• Collect and make public on a regular basis nationally consistent data on housing supply, demand and affordability. This includes the volume and price of land, material costs, availability of labour, training schemes, enabling infrastructure and time taken to navigate planning and development processes.
• Advise on ways to improve land use planning and land supply which will boost national productivity and improve housing affordability.
• Report on the release of government owned land.
• Report on rental affordability and homelessness.
• Report on the number of new social and affordable homes being built annually and advise on ways to boost the construction of social and affordable housing.
• Advise on appropriate housing measures to be included in all current and future City and Regional Deals.

The Council will also undertake any other related research it considers has a potentially material impact on housing supply and affordability.

More details about the National Housing Supply and Affordability Council can be found here.

Regional First Home Guarantee

Under this Guarantee, the Labor Government will help 10,000 first home buyers a year in regional Australia to buy a home.

First home buyers will save up to $32,000 in mortgage insurance and be able to secure a home with a deposit as low as 5 % – with the government guaranteeing up to 15 per cent of the purchase price.

More details about this scheme can be found here.

Housing Australia Future Fund

The ALP has also promised to create a $10 billion Housing Australia Future Fund. This will be used to build 30,000 new social and affordable homes.

Over the first 5 years the investment returns will build around:

• 20,000 social housing properties – 4,000 of which will be allocated for women and children fleeing domestic and family violence and older women on low incomes who are at risk of homelessness.
• 10,000 affordable homes for the frontline workers like police, nurses and cleaners enabling them to live closer to where they work.

More details about this scheme can be found here.

Eligibility age change for downsizer contributions

To encourage older Australians to downsize their homes, they are able to contribute up to $300,000 into their superannuation if they sell their home.

From 1 July 2022 the eligible age is 60 years old or older. Prior to this it is 65 years old or older. In its campaign, Labor had said it would match the Coalition’s election promise to further reduce this age to 55 years old or older in the future.

More details on downsizer contributions can be found here.

Negative gearing

Investors breathed a sigh of relief when Labor backed down from its earlier proposed changes to negative gearing. Instead, it promised to “maintain existing regimes for negative gearing and capital gains tax” during the party’s tenure in power following the 2022 election.

What happens now remains to be seen!

In the meantime, as your local experts in real estate, we’re always here for an informal chat to answer questions; with nearly 50 years in the business, we’ve helped thousands of people realise their financial dreams through property.

Find out more about our services can help you by ringing 02 4954 8833, or send us an email to mail@apnewcastle.com.au. You can also see us at our Cardiff office.

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