Election Policies Target Home Ownership
Labor and the Coalition revealed competing housing policies on Sunday. Both parties aimed to support first home buyers into ownership.
The announcements come ahead of pre-polling, which opens in nine days. Each plan presents a different strategy to tackle housing affordability.
Labor Pledges $10 Billion Housing Fund
Labor promised to invest $10 billion in constructing 100,000 new homes. The homes will be reserved for first home buyers nationwide.
Labor will coordinate with state governments to fast-track land releases and planning approvals. The policy will enable buyers to access homes with a 5% deposit.
The plan includes an exemption from lender’s mortgage insurance. First home buyers can avoid around $23,000 in additional costs.
Housing Minister Clare O’Neil said Labor wants “to help young Australians pay off their own mortgage, not someone else’s.”
“Young Australians are bearing the brunt of the housing crisis and our government is going to step up to give them a fair go at owning their own home,” she said.
Coalition Proposes Tax Deductions for Mortgage Payments
The Coalition announced a policy allowing first-time buyers to deduct mortgage payments from income tax. The deduction applies only to new builds.
There are no limits on home prices or mortgage sizes. However, the deduction will only apply to the first $650,000 of a loan.
The scheme is restricted to the first five years after the home purchase. Eligibility is capped at $175,000 income for individuals and $250,000 for couples.
A couple may split the benefit but cannot claim it twice. The Coalition said a buyer on $120,000 income with a $650,000 mortgage would save $12,000 annually.
Coalition housing spokesperson Michael Sukkar said the policy is a “massive structural change to our tax system.”
“In Australia you only get a new house built if someone is prepared to commit,” he said. “The way you unlock supply is encourage someone to pre-commit to a new dwelling.”
Greens Criticise Major Party Plans
The Greens proposed caps on rent increases and new limits to negative gearing. They also want to reduce capital gains tax discounts.
Party leader Adam Bandt described Labor’s plan as “tinkering around the edges.” He criticised the Coalition’s scheme as a “dangerous debt trap.”
“We won’t stand in the way of Labor’s policy, but tinkering around the edges won’t be enough to stop house prices skyrocketing because of tax handouts to wealthy property investors,” Bandt said.
“Peter Dutton’s plan is a dangerous debt trap that could push house prices to skyrocket even further out of reach of renters and first home buyers.”
Expert Views on Market Impact
Hal Pawson from the UNSW City Futures Institute said Labor’s plan may ease prices slightly. He noted the number of homes “is not a completely transformational number.”
He said buyers of cost-price government-built homes could save 20% to 25%. Private developers generally require that profit margin to secure loans.
Pawson said the Coalition’s plan may raise property prices. However, limiting the scheme to new builds helps reduce market-wide inflation.
“If it’s for new-build only it’s not nearly as damaging as if it was allowed across the whole system,” he said.
Pawson welcomed both plans but said they fall short of the national target. Australia aims to build 1.2 million new homes by 2029.
“Intervening more directly to ensure additional construction ringfenced for first home buyers will also help,” Pawson said.
He described the tax deduction proposal as a “big move” and the first major shift in decades. “My response would be ‘good on them,’” he said.
Pawson said such tax relief makes sense during initial home purchase. But he called for broader reforms to existing tax settings that worsen affordability.
“If the Coalition is willing to propose a major change of that kind, then bring on a much much bigger review whether that’s the sensible thing to do in the context of all the other tax settings that are mostly damaging our housing system,” he said.
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Industry Groups Respond Positively
The Master Builders Association welcomed both announcements. Chief executive Denita Wawn called Labor’s policy “good economic and social policy.”
Wawn described the Coalition’s scheme as “a positive and practical long-term incentive.” She said it could support market-driven construction activity.
Wendy Hayhurst from the Community Housing Industry Association praised Labor’s plans. She welcomed the promise to increase supply of social and affordable rental homes.
“This is a critical aspect of the policy that will help address housing needs across the spectrum,” Hayhurst said.
Conclusion
Both Labor and the Coalition positioned their housing policies as election centrepieces. They promised pathways to home ownership for younger Australians.
Industry groups and experts offered cautious support. But most agreed that deeper reforms and sustained government intervention remain necessary.
