Peter Dutton’s plan to make mortgage payments tax deductible for first homebuyers

Peter Dutton has unveiled his bold new plan to allow first homebuyers to tax deduct their mortgage repayments in a bid to win over young voters.

Peter Dutton will allow first home buyers on low and middle incomes to tax deduct interest payments on mortgages worth up to $650,000 under a radical plan to boost home ownership among young Australians.

The plan, designed to reverse declining home ownership rates, will allow first home buyers purchasing a new build apartment or house to deduct a capped amount of interest from their income tax for the first five years after they buy.

The Coalition estimates the scheme would be worth around $11,000 a year to families or $55,000 over five years, dwarfing any other cost-of-living promise at this election.

Peter Dutton unveils his radical plan to boost home ownership among young Australians at the Coalition’s campaign launch in western Sydney. Picture: Richard Dobson

The details of the scheme, to be announced later today at the Coalition campaign launch in Sydney will allow the homebuyers to deduct their interest on the first $650,000 of a mortgage.

Payments on any housing debt above $650,000 will not be deductible.

It will also be confined to people on individuals on incomes up to $175,000 and $250,000 for couples, which will be based on the previous year’s taxable income at the time they enter the scheme.

If however their income rises during the five years after they buy they will still be able to deduct their mortgage interest.

In a bid to stimulate the industry the deduction will also be confined to new dwellings – that is new dwellings that have not been occupied.

Only Australians will be eligible for the scheme and purchasers will have to live in the property to get the deductibility.

Originally published as Peter Dutton’s plan to make mortgage payments tax deductible for first homebuyers