Labor has reactivated its Help to Buy scheme, which means you can move into a “home” with just a 2 per cent deposit.
It is what’s known as a “shared equity scheme” and was part of the 2022 federal government election commitment.
It means you can co-buy a home, with the government offering a helping hand.
The scheme will give people an “equity contribution” of up to 40 per cent of the cost of a new home, or 30 per cent for existing homes.
It can be a house, unit or townhouse.
The buyer won’t need to pay rent on the stake owned by the government.
But you will have to pay a component of any capital gain back to the government.
The capital gains will be calculated in reference to the size of the government’s equity share in the property.
For example, if the government holds a 30 per cent share in the property, then it would be entitled to 30 per cent of the proceeds of sale, which includes 30 per cent of any capital gains earned.
Seems like an interesting idea, though I get the feeling this is just going to keep inflating property prices right? It’s not doing anything to address the increased cost of housing, just helping more people enter the overpriced market.
Eh - I don’t think this will drive demand up much. 600,000 homes were bought last year in Australia. This scheme is only available to 10k buyers per year.
Also, it’s not a new scheme, it’s a modification to an existing one. I bought my home a few years ago under it… the modified scheme is a little more generous but I don’t think it will move the needle on house prices, but for those 10k lucky families per year it will definitely move the needle.
Owning our own home has been life changing for us.
Also - it could be argued that raising the value of homes will increase supply. It’ll incentivise more people to build, and therefore more homes will be built.