Scott Morrison slams Labor’s plan to help Australians buy a home by letting the government buy a stake – so how WILL it all actually work?
- Labor has proposed a plan to offer to take a 40 per cent stake in People’s Homes
- The move would allow Australians struggling with purchasing to stretch their budget
- But Scott Morrison slammed policies that would bring government money
Scott Morrison has blasted Labor’s policy of helping Australians buy homes with a 40 per cent stake in new property.
The Prime Minister said Anthony Albanese was “making money with you” after the Labor leader said the policy would generate money for the government.
With Labour’s new ‘Help To Buy’ scheme the government would bring in up to 40 per cent of the cost of a new house and up to 30 per cent of an existing house.
The program would be available to couples with less than $120,000 and singles with less than $90,000.
Scott Morrison has blasted Labor’s policy of helping Australians buy a home by taking a 40 per cent stake in the property. Pictured: Anthony Albanese on Monday
When the homeowner eventually sells their home, the government would pocket 30 or 40 percent of the sale and make money for the taxpayers.
But Mr Morrison said it would be immoral for the homeowner to spend thousands on renovations only to see the government make money on their improvements when they sell.
“So what happens when you decide to renovate your home?” he said.
“If your house goes up in value, they make money off you. So if your house price goes up, your house value goes up, they take a cut, and you have to pay the government back your equity and capital gains.
“I mean, they’re basically riding on your decision to buy your own home.”
Mr Morrison said another major flaw in the system was that it would only send house prices higher.
“You will go to an auction and there will be someone who will bid against you and they will bid with the government and you will bid yourself,” he said.
“So I don’t think Labor has thought these things through.”
Prime Minister Scott Morrison plays billiards with residents of the Lifestyle Communities Mount Duneed seniors’ village on the outskirts of Melbourne
HOW HELP WORK TO PURCHASING SYSTEM WORKS
Help to Buy is available to Australians with taxable income of up to US$90,000 for individuals and up to US$120,000 for couples.
Homebuyers must be Australian citizens and not currently own or be interested in a home. You don’t have to be a first home buyer.
Eligible homebuyers receive an equity contribution of up to 40 percent of the purchase price of a new home and up to 30 percent of the purchase price of an existing home.
The homebuyer must have a 2 percent down payment and qualify for a standard home loan with a participating lender to fund the remainder of the purchase.
During the term of the loan, the homebuyer can purchase a portion of the total government interest in the home if they are able to.
The homebuyer does not have to pay rent on the portion of the home owned by the federal government.
Labor expects the scheme to cost $329 million but will make money for the government by getting back its share of the equity when houses are sold, plus its share of any profits made from the house’s increased value when it is sold .
The value of eligible homes would differ by region, as shown in the table, with the government proposing to provide varying levels of support between states and regional and metropolitan areas
According to Labour, a cap of 10,000 places per year will prevent the scheme from driving up prices.
Mr Morrison said 164,000 Australians got their first home last year – 70,000 more than when Labor left office.
His government introduced the Home Guarantee Scheme, allowing Australians to buy first homes with as little as a five percent down payment, with the government guaranteeing the other 15 percent.
Single parents only need a deposit of two percent.
Last month, the prime minister announced an increase in the price cap to a maximum of $900,000.
Declining housing affordability has caused home ownership among low- and middle-income earners to fall from 60 percent to 28 percent over the past 40 years.
The Australian Bureau of Statistics reported a 23.7 percent increase in house prices in the last 12 months alone.
