Albo’s ‘innovative’ housing scheme worth giving a go

Anthony Albanese’s signature $329m housing scheme is stuck in neutral thanks to red tape and the Greens but it is worth trialling if it can get Aussies renters into their dream home.

OPINION

It was May two years ago when Anthony Albanese unveiled a $329m Help to Buy housing initiative as the centrepiece of Labor’s election campaign launch.

The flagship scheme is not yet up and running but there is now public consultation of the proposed parameters of the controversial program, which is seeking public feedback until May 21.

The shared-equity housing scheme was always intended to be implemented in addition to the Morrison government’s First Home Guarantee scheme.

It has some innovative ideas that deserve to be trialled.

Under the proposal, 10,000 first-time property buyers annually will be able to ­purchase a home with as little as a 2 per cent deposit.

The government will secure up to a 30 per cent equity stake if they buy into the established market or a 40 per cent share in a new build.

Albo’s Help to Buy scheme is worth trialling. Picture: Getty

They can be valued up to $950,000 in Sydney, $850,000 in Melbourne, $650,000 in Brisbane, $600,000 in Canberra and $550,000 in Adelaide, Perth, Hobart and Darwin.

“The intention of the price caps is to support applicants to purchase modest homes,” the draft paper advises, noting the caps will vary across the country.

The federal government share percentage will be reduced where the participant willingly makes voluntary early repayments or makes qualifying home improvements. The government will receive a share of the sale equal to the value of its equity stake when the property gets sold.

Singles earning up to $90,000 each year and couples with a combined income of $120,000 will be eligible. Joint applications may include two siblings, a parent and child, or two friends, which is innovative.

Buyers will have to meet their lender’s serviceability requirements and cover all transaction costs, including stamp duty. But applicants will avoid the need to pay hefty lenders mortgage insurance.

The purchases must be at arm’s length dealings – unaffiliated and acting in their own interests.

Holding a property will see applicants ineligible, but there will be flexibility so a single parent can participate if they commit to sell their existing home on taking up the new residency. The scheme to be run by Housing Australia has stalled in the bureaucracy and the parliament.

It first needed the approval of the states.

The Greens leader Adam Bandt, who has described the scheme as a “housing lottery”, has said he will only support it if he gets his way on freezing rent increases, building more public housing, phasing out negative gearing and increasing the capital gains tax.

Scheduled to run for four years, the legislation for the scheme has passed through the lower house, and is stuck in the Senate without the support of Greens, who hold the balance of power in the absence of any approval from the Coalition.

Federal Housing Minister Julie Collins says the Liberal National Party is standing in the way of helping thousands of renters from buying their own home.

Originally published as Albo’s ‘innovative’ housing scheme worth giving a go