With the 2025 federal election just days away, housing affordability remains a central issue—especially for first home buyers striving to enter the property market. Both major parties have unveiled policies aimed at assisting first-time buyers, but their approaches differ significantly. This blog breaks down what Labor and the Coalition are offering, helping you understand how these policies might impact your journey to homeownership.
🏡 Labor’s Approach: Expanding Access and Boosting Supply
Labor’s housing policy focuses on broadening access to homeownership and increasing housing supply:
1. Universal 5% Deposit Scheme
Labor proposes expanding the First Home Guarantee scheme to allow all first home buyers to purchase a home with just a 5% deposit, eliminating the need for lenders mortgage insurance (LMI). This expansion removes previous income caps, making the scheme universally accessible.
2. Help to Buy Shared Equity Scheme
The ‘Help to Buy’ program enables eligible buyers to purchase a home with as little as a 2% deposit, with the government contributing up to 40% of the property’s value in exchange for an equity stake.
3. $10 Billion Investment in New Homes
Labor commits to investing $10 billion to construct 100,000 new homes exclusively for first home buyers over the next five years. This initiative is designed to address housing supply shortages and provide more affordable options for new buyers.
🏠 Coalition’s Strategy: Financial Incentives and Market Stimulation
The Coalition’s housing policy emphasizes financial incentives and stimulating new housing construction:
1. Mortgage Interest Tax Deduction
Under the proposed First Home Buyer Mortgage Deductibility Scheme, first home buyers purchasing new builds can claim a tax deduction on mortgage interest payments for the first five years, applicable to loans up to $650,000. Eligibility is means-tested, with income caps of $175,000 for singles and $250,000 for couples.
2. Access to Superannuation for Home Deposits
The Coalition plans to allow first home buyers to access up to $50,000 from their superannuation to use as a home deposit, providing greater flexibility in funding their first home purchase.
3. Enhancements to the Home Guarantee Scheme
Proposed enhancements include increasing income caps to $175,000 for singles and $250,000 for couples, raising property price caps, and removing the cap on the number of scheme places, thereby expanding eligibility and accessibility.
🏘️ Comparative Overview
| Feature | Labor | Coalition |
|---|---|---|
| Deposit Requirement | 5% with no LMI | 5% with no LMI |
| Income Caps | None | $175k (singles), $250k (couples) |
| Property Price Caps | Increased to reflect city medians | Increased |
| Shared Equity Scheme | Yes (up to 40% government stake) | No |
| Mortgage Interest Deduction | No | Yes (up to $650k loan for 5 years) |
| Superannuation Access | No | Yes (up to $50,000 for deposit) |
| New Homes Construction | 100,000 homes for first home buyers | Focus on stimulating new builds through incentives |
📝 Final Thoughts
Both parties offer promising policies—but with different priorities.
- Labor focuses on expanding access through reduced deposit requirements and shared equity schemes, coupled with a significant investment in new housing supply.
- The Coalition emphasizes financial incentives, such as tax deductions and superannuation access, aiming to stimulate new housing construction and provide immediate financial relief.
If you’re looking to buy your first home, understanding these differences could help you plan your path forward—no matter the election outcome.
Source : https://www.mortgagechoice.com.au/news/how-labor-and-lnp-pitches-to-first-home-buyers-compare/
