Scott Morrison’s Super Home Loan scheme is officially off the table after the Coalition lost the federal election to Labor.
Morrison’s scheme would have allowed first home buyers to access 40 per cent of their superannuation up to $50,000.
Also read: Hidden cost of Morrison’s housing scheme
But, after Anthony Albanese’s historic election win on Saturday, let’s take a look at what his Government is promising to help first home buyers crack into the housing market.
Labor’s Help to Buy scheme
Labor’s Help to Buy scheme plans to help Aussies get into the housing market sooner by cutting the cost of buying a home by up to 40 per cent.
Eligible home buyers will need a minimum deposit of 2 per cent, with an equity contribution from the Federal Government of up to a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home.
Similar schemes are already successfully operating in several states, including Western Australia and Victoria.
Homebuyers would not be required to pay rent on the stake of the home held by the Federal Government.
However, if their income exceeds the Help to Buy annual income threshold for two consecutive years, they will be required to repay the Government’s financial contribution in part or whole, as their circumstances permit.
Homebuyers will also avoid the need to pay lenders mortgage insurance, representing an additional saving - depending on purchase location - of potentially more than $30,000.
During the loan period, the homebuyer can buy an additional stake in the home when they are able to do so.
The minimum stake a homebuyer could opt to purchase at any one time would be 5 per cent.
Help to Buy would be open to 10,000 Australians each financial year.
Who is eligible?
You will be eligible for Labor’s Help to Buy program if you:
Are an Australian citizen of at least 18 years of age
Earn $90,000 or less per annum for individuals, or $120,000 or less per annum for couples
Live in the purchased home as your principal place of residence
Not own any other land or property – either in Australia or overseas
Have saved the required minimum 2 per cent deposit of the home price and qualify (and can finance) the remainder of the purchase through a standard home loan with a participating lender
Pay for any associated purchase costs like stamp duty, legal and bank fees
Homebuyers would also be responsible for ongoing property costs like rates, strata and any other bills.
How much would you save?
The following table shows how much people will save on their mortgage under Labor’s Help to Buy in different cities and regions.