PHOTO: Labor is promising to pay up to 40 per cent of the cost of a new home and up to 30 per cent of the cost of an existing home for up to 10,000 Australians each year to help them break into the property market.
- Anthony Albanese is set to announce a major plan to address housing crisis
- Labor government will pay up to 40 per cent of the sale of a new house
- Deal could save home-owners $380,000 in some parts of Australia
- Debt doesn’t need to be repaid until the home is sold, but buyers can pay it off
Anthony Albanese is set to unveil a revolutionary plan where a Labor government will pay up to 40 per cent of the sale price of homes to make it easier for buyers to get on the property ladder.
Soaring real estate prices has seen millions locked out of the property market with seven-figure house prices and massive deposits making home-buying impossible for many.
Under the key new election pledge – to be announced at Labor’s official election campaign launch on Sunday – up to 10,000 homebuyers each year will be eligible for the Labor leader’s Help To Buy scheme
Labor says the radical solution will mean a smaller deposit, a smaller mortgage and smaller mortgage repayments.
The party claims the plan will cut the cost of a mortgage by up to $380,000 in some parts of Australia.
Labor leader Anthony Albanese (pictured) says more needs to be done to address the nation’s skyrocketing house prices, while the LNP maintains their current strategy is working
The scheme will be aimed at Australian citizens who don’t own or have interest in a residential property, on a single income below $90,000 or $120,000 for couples.
Labor estimate the ‘Help to Buy’ scheme will cost the government $329 million, but the figure could soar depending on the housing market and mortgage interest rates.
But the government will effectively own one or two bedrooms in each shared homes – and the government’s investment will need to be repaid when the home is sold, plus a proportional share of any profit made on the original price.
Buyers can buy out all or part of the government’s share at any time though – but repayments will not be expected during the whole time the home is owned.
The government will chip in up to 40 per cent of the cost of a new home, and up to 30 per cent of an existing home, depending on their values.
The home buyer would then still need a 2 per cent deposit and to qualify for a standard home loan to finance the remaining stake of the property purchase.
The value of eligible homes would differ by region shown on the table, with the government proposing to assistance in varying degrees between states and regional and metropolitan areas
Worsening housing affordability has seen home ownership for low and moderate income earners decline from 60 per cent to 28 per cent over the last 40 years.
The Australian Bureau of Statistics reported a 23.7 per cent increase in residential property prices in the last 12 months alone.
‘After nine long years in Government, housing affordability has only got worse under the Liberal-National Government,’ said Mr Albanese.
‘Help to Buy is part of Labor’s plan to tackle the housing crisis.’
Shadow Housing Minister Jason Clare said the scheme will reduce the deposit and mortgage repayments, and axe lender insurance costs for eligible home buyers.
‘It’s harder to buy, harder to rent and there are more homeless Australians than ever before,’ he said.
‘This will help a lot of Australians buy a home with a smaller mortgage that they can afford to repay, instead of renting for the rest of their lives.’
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