Australia’s opposition unveils a new housing policy allowing first-time buyers of newly built homes to deduct mortgage interest from taxable income. The plan, limited to five years, aims to ease home ownership barriers and stimulate construction activity.
Coalition Steps Into Housing Debate With Targeted Tax Concession
The Coalition has announced a significant housing policy designed to support first-time home buyers, offering a tax deduction on mortgage interest payments for newly built properties.
The policy, unveiled by opposition leader Peter Dutton during the party’s campaign launch in western Sydney, directly challenges the government’s own initiatives to improve housing affordability.
Under the proposal, eligible buyers would be allowed to deduct interest on up to $650,000 of their mortgage from their income tax for a period of five years, providing what the Coalition claims could amount to a saving of approximately $11,000 annually for a typical family.
According to ABC, this would represent a structural shift in the national tax framework, with an estimated $1.25 billion cost to the federal budget over the forward estimates.
The scheme would apply only to newly constructed homes, with eligibility capped at incomes of $175,000 for singles and $250,000 for couples. Buyers must reside in the property but may remain in the scheme even if their income increases during the benefit period.
Incentivising New Builds to Tackle Housing Supply
In addition to offering tax relief, the Coalition’s mortgage deduction scheme is framed as a strategy to stimulate the construction of new housing. By tying eligibility to new builds, the opposition contends that the policy will contribute to expanding the housing stock, thereby easing pressure on the market.
“The way you unlock supply is encourage someone to pre-commit to a new dwelling,” said Michael Sukkar, the opposition’s housing spokesperson, in an interview with ABC News. He described the policy as “a massive structural change to our tax system” intended to give first home buyers “the firepower in the first place”.
The proposal comes as the Labor government prepares to present its own expanded housing policy, which includes support for first home buyers through access to the market with a 5 per cent deposit and the removal of lenders’ mortgage insurance requirements. Labor has also committed $10 billion to build 100,000 new homes over eight years, with a focus on affordability.
