Liberals announce new first-time buyer deposit scheme — Labor promises to match

A week out from the upcoming polling day, Prime Minister Scott Morrison has pitched a campaign to support first home buyers — and Labor has agreed to match it.

The Coalition plans to help young Australians achieve home ownership dreams by launching a home deposit scheme for couples earning less than $200,000 and singles earning less than $125,000. 

Modelled on a New Zealand policy, the scheme allows borrowers to pay only a 5 per cent home deposit instead of the usual 20 per cent, with a guarantee from the National Housing Finance and Investment Corporation to cover the excess.

“I believe that Australia is a promise to everyone who has the great privilege to call themselves an Australian. It’s the promise that allows Australians quietly going about their lives to realise their simple, honest and decent aspirations,” Morrison said in a speech on Sunday. 

Graham Wolfe from the Housing Industry Association said the proposed plan would be a huge relief for first-time buyers, adding that there are many people who should be able to afford a mortgage but have struggled to save enough for a deposit while also paying rent.

"They've already got a savings record to the extent that they've been paying a rental accommodation, so I think they've shown their capacity to service a loan," he said. "Prices have eased and there are a lot of first home buyers who have been watching on the sidelines, waiting for their turn.”

Labor has declared it will match the Coalition’s scheme. Shadow treasurer Chris Bowen said in a statement, “We back genuine support for first home buyers — that’s why we’re also reforming negative gearing for future purchases, so young Australians don’t have to keep losing out to wealthy property speculators.”

Labor will cut back the Capital Gains Tax from 50 per cent to 25 per cent for newly-purchased property assets held for more than one year, and three-quarters of each gain will be taxed instead of half. This means fewer high-profile investors will crowd the market and first-time buyers will have a better chance of getting their ideal first home.

“We can afford to deliver a fair go for all Australians and reverse the Liberals’ cuts, because we are closing down loopholes for the top end of town,” Bowen adds.