Election day has come and gone, and the Liberal party remains in power. The Coalition promises to tackle housing affordability, help first-time buyers get a foot in the door of the property market, and reduce taxes for investors. Let’s take a look at some of their incentives.
First Home Loan Deposit Scheme
The scheme will subsidise home deposits for up to 10,000 per annum first-time buyers earning less than $125,000 (or $200,000 for couples). This means you won’t have to struggle to save the standard 20 per cent deposit and can pay as little as 5 per cent instead. The National Housing Finance and Investment Corporation (NHFIC) will partner with private lenders to cover the gap. The scheme is due to commence on the 1st of January next year.
The government is also investing $25 million in the NHFIC in a bid to find out more about housing demand, supply and affordability in Australia. The outcome of this research will inform future plans surrounding homes and, hopefully, will result in a new strategy for helping everyday Australians achieve homeownership.
Stance on Capital Gains Tax (CGT)
Labor’s promise to reduce the threshold for negative gearing would have helped first-time buyers. It would have dissuaded wealthy investors, freeing up more properties for first-time buyers. This doesn’t really matter in the sale of off the plan residences and some finance experts suggest it would have had a negative impact on the market in the long run, driving prices higher and weakening the economy. If you have a tidy property portfolio you can rest easy knowing this won’t be changed just yet.
National Affordable Housing Agreement (NAHA)
The government has already implemented a reform of the NAHA. First introduced in 2009, the NAHA provides $1.5 billion per annum to state and territory governments in a bid to tackle homelessness. Much of these funds go towards public and social housing and, now, a new set of agreements has been added which require delivery on housing supply targets. Add to this the fact that the Liberals plan to increase the CGT threshold to 60 per cent for investors of social housing, and we might see a stronger build-to-rent sector in the coming years.
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