New scheme to help first home buyers save a deposit

WOULD-BE first homeowners struggling to break into the tough Australian property market could finally have the solution they’ve been looking for.

Are tax breaks the answer to solving the housing affordability crisis? Picture: Sarah Matray

WOULD-BE first homeowners struggling to break into the market could finally have the solution they’ve been looking for.

Canberra is abuzz with talk of new tax breaks to help young Australians buy their first home, after the Daily Telegraph revealed that an approach similar to salary sacrificing was being considered as a way to speed up the time it takes to save for a deposit.

It comes after a controversial proposal to allow people to use their superannuation to raise a deposit has divided the Turnbull Government ahead of the Federal Budget.

Cabinet minister Matt Canavan said the government was “alive” to the issue of housing affordability but won’t confirm the May budget will include a new saving plan for first home buyers.

“We are focused on making sure Australians can afford a home, it is a fundamental principal of the Liberal-National government people,” Mr Canavan told Sky News on Sunday.

Treasurer Scott Morrison has flagged housing affordability as a key part of the May 9 budget.

Opposition frontbencher Mark Butler said the government was dusting off a Labor policy it abolished in the 2014 budget.

“I think it’s fair to say that the first homeowner grant scheme that we put in place didn’t have time to show itself,” Mr Butler told ABC television.

“But the critical message is this: you cannot deal with housing affordability in Australia without dealing with negative gearing.” He said until the government dealt with that, any housing affordability policy would be a “sham”.

Greens senator Sarah Hanson-Young agreed.

“Just putting more money into the bidding process isn’t necessarily going to reduce the cost of housing,” she told ABC television.

“We have to bring the pressure down, not just give people more money to go straight into the hands of property investors.”