The Federal Government’s proposed Help to Buy scheme would see the government co-own up to 40 per cent of a house until the homeowner could afford to pay it out. Photo: File.
The Federal Government’s dream for Australian homeowners is becoming a nightmare as the Greens threaten to vote down legislation that would see the government co-own houses to help people break into the real estate market.
The proposed Help to Buy scheme would see the government buy in with up to 40 per cent of the cost of a new house and 30 per cent for an existing one until the homeowner could afford to pay it out.
Housing Minister Julie Collins described the plan as “life-changing” for thousands of Australians locked out of home ownership.
It aims to help 40,000 households over four years.
Individuals earning less than $90,000 a year and couples earning less than $120,000 a year could pay as little as 2 per cent as a home deposit under the proposed scheme.
The homeowners’ repayments would also be lower while they remain in the scheme.
However, the Greens are not on board, saying the government must also introduce rent caps into legislation, wind down negative gearing tax benefits for property investors and build more public housing.
The government insists it won’t do a deal with the Greens to ensure the successful passage of the scheme.
In the Senate, the Greens will have the numbers to sink the bill if they join the Coalition, which has already expressed its distaste for it.
Greens housing spokesman Max Chandler-Mather said the legislation was not good enough.
The limit of 10,000 applicants a year and capping prices on eligible properties weakens the bill.
He said the scheme would only help about 0.2 per cent of buyers each year.
“You can tinker around the edges on this bill, but you will not fix the housing crisis unless you deal with the billions of dollars in tax handouts for property investors,” Mr Chandler-Mather said.
“It should not be the case that a first-time buyer at an auction loses to a property investor who gets massive tax handouts from this Labor government.
“The ball is in Labor’s court. Unless we see movement on the things that are pushing house prices out of the reach of millions of renters across the country and a fix to negative gearing and capital gains tax handouts, capping of rents and building public housing, we will vote against it.”
He said house prices could also feasibly be artificially inflated because of the scheme as it stands.
The Greens’ opposition to the bill in the House of Representatives won’t impact the outcome as Labor has a majority.
It is in the Senate where it could all come unstuck for the government.
However, it was question time in the House of Representatives on Tuesday (27 February) when Ms Collins accused the Greens and the Coalition of joining forces to sabotage the bill at the expense of Australians who need the help the scheme would provide.
“These are real people who need real assistance to get into home ownership,” the Minister said.
“[The Greens and the Coalition] are joining forces to keep people out of home ownership. They should be supporting the 40,000 Australians who are depending on it.”
The Coalition says the scheme won’t work because house prices are already spiralling above its eligibility thresholds.
In some parts of Australia, battlers wouldn’t be able to apply because of the cost of houses.
While the Help to Buy scheme is intended to support Australians who otherwise would not be able to purchase a home, states will still need to pass their own legislation for it to operate in their jurisdictions.
The states agreed in National Cabinet to progress legislation so the scheme could run nationally this year.
In the territories, the scheme would operate immediately following passage of Commonwealth legislation. If it passes.
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