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Buying your first home? The Election just made things interesting…
REAL STORIES
Game-changing housing promises from both sides, but which policy will help you?
As the May 3 Federal Election approaches, housing affordability has taken centre stage, with both major parties outlining contrasting policies aimed at supporting Australians taking their first step into the property market.
While Labor and the Coalition share a common objective — improving access to home ownership — the methods proposed reflect different economic and policy priorities.
The Coalition’s proposal: Tax incentives and supply targets
Opposition Leader Peter Dutton has promised to “restore the dream of home ownership” with a two-part housing package aimed at first home buyers and middle-income earners.
The headline measure is the First Home Buyers Mortgage Deduction Scheme, which would allow eligible purchasers of newly built homes to deduct a portion of their mortgage interest from their taxable income. This would apply to the first $650,000 of a mortgage and be available for five years.
Eligibility is limited to singles earning up to $175,000 and couples earning up to $250,000. Importantly, only new builds are eligible — a move the Coalition argues will stimulate construction and add supply to the market.
Unlike other housing assistance schemes, there would be no application process — the deduction would be claimed at tax time in the same way as other expenses. If legislated, the scheme would commence within the Coalition’s first 100 days in office.
The Coalition also announced a one-off income tax rebate of up to $1,200 for individuals earning up to $144,000. The rebate would apply for the 2025–26 tax year and is intended to alleviate pressure from the rising cost of living. These measures would be funded by reversing Labor’s proposed $17 billion tax cut package.
Labor’s expansion: Broader access to Government Guarantees
The incumbent government is taking a different route. Labor has proposed an expansion of its First Home Buyers Guarantee Scheme, which currently allows eligible participants to purchase a home with a 5% deposit without needing to pay for Lender’s Mortgage Insurance (LMI).
Under the expanded policy, all first-time buyers — regardless of profession — would be eligible to access the guarantee from 1 January 2026, removing the current occupational restrictions and further lowering the entry costs for buyers.
According to Labor, the removal of LMI (which typically costs around $23,000 for the average first home buyer) combined with a low deposit requirement could significantly reduce upfront expenses and support a faster entry into the market.
Key differences
Scope: The Coalition policy is limited to new builds; Labor’s applies to any property, provided the buyer qualifies as a first-time purchaser.
Mechanism: The Coalition provides tax relief over time, while Labor reduces the deposit barrier and immediate purchase costs.
Start Date: The Coalition plans to legislate within 100 days of the election; Labor’s changes are scheduled to begin from 1 January 2026.
What it means for buyers:
These announcements signal a clear focus from both parties on home ownership as a national priority. However, they represent very different pathways — one focused on tax-based incentives and supply, the other on reducing barriers to entry through guarantees and upfront cost reductions.
At MRE, we continue to monitor how these policies may impact market conditions, buyer sentiment, and future supply trends. Whether you are a first home buyer planning your entry into the market or an investor seeking clarity in a shifting landscape, informed guidance makes all the difference.
If you are considering a purchase, now is the time to start the conversation. Speak with our Sales team for tailored insights, property opportunities, and a clear strategy based on current market conditions — no assumptions, no guesswork.
Thinking about buying? Let’s talk.
Whether you're ready to take your first step into the market or weighing up your options, a short conversation with an MRE sales consultant can give you the clarity you need.
Steve Fitzsimon
Steve Fitzsimon
