Labor's Shared Equity Home Buyer Scheme

TL;DR

Labor's shared equity policy allows 10,000 home buyers in Australia annually to purchase a new property with the government owning up to 40% of the property and offering interest-free payments. It enables buyers to enter the market with as little as a 2% deposit.

Transcript

g'day and welcome to this week's video my name is robert gowdy from consortium private wealth and a couple weeks ago just prior to the australian election i did a an interview with their local abc morning program and it went through the liberals their policy and scheme to help first home buyers get into the market and yeah so we covered off that is... Read More

Key Insights

• 👪 Labor's shared equity scheme allows home buyers to enter the market with a smaller deposit and without the need to pay interest or rent on the government's share.
• 👪 The scheme particularly benefits individuals who have divorced or separated and are currently renting.
• ✋ There are income limits for eligibility, with higher-income individuals and couples excluded from the scheme.
• 😮 The scheme helps address the challenge of building up a 20% deposit, which has become increasingly difficult due to rising house prices.
• 🏙️ Buyers can purchase properties up to certain values based on city categories, with higher thresholds in major cities compared to regional areas.
• 👻 The scheme provides financial flexibility, allowing buyers to contribute to superannuation earlier due to lower mortgage repayments.
• 🙃 Owning a home provides emotional security, and the government's ownership share is not seen as a major concern.

Questions & Answers

Q: How does Labor's shared equity scheme work?

Under the scheme, 10,000 home buyers in Australia each year can purchase a new property with the government owning up to 40% of the property or up to 30% for existing properties. This reduces the amount buyers need to borrow and allows them to achieve homeownership sooner.

Q: Do buyers have to pay interest or rent on the government's share?

No, buyers do not need to pay any interest or rent on the government's ownership share. This makes it a financially attractive option as it reduces the burden of monthly repayments.

Q: Who is eligible for Labor's shared equity scheme?

The scheme is not limited to first home buyers. Any home buyer who doesn't currently own a residential property can participate. However, there are income limits, and individuals earning $90,000 or more and couples earning $120,000 or more are excluded from the scheme.

Q: Can buyers buy back the government's ownership share?

Yes, buyers have the opportunity to buy back the government's ownership share in increments of 5%. However, if the buyer's income exceeds the income limits, the government may require a partial repayment.

Summary & Key Takeaways

• Labor's shared equity scheme allows home buyers in Australia to purchase a new property with the government owning up to 40% or up to 30% for existing properties.

• The scheme eliminates the need to borrow up to 40% of the usual amount, allowing buyers to achieve homeownership sooner and with as little as a 2% deposit.

• The government does not charge any interest or rent on their ownership share, providing a "free ride" for buyers.