Labor has reactivated its Help to Buy scheme, which means you can move into a "home" with just a 2 per cent deposit.
It is what's known as a "shared equity scheme" and was part of the 2022 federal government election commitment.
It means you can co-buy a home, with the government offering a helping hand.
The scheme will give people an "equity contribution" of up to 40 per cent of the cost of a new home, or 30 per cent for existing homes.
It can be a house, unit or townhouse.
The buyer won't need to pay rent on the stake owned by the government.
But you will have to pay a component of any capital gain back to the government.
The capital gains will be calculated in reference to the size of the government's equity share in the property.
For example, if the government holds a 30 per cent share in the property, then it would be entitled to 30 per cent of the proceeds of sale, which includes 30 per cent of any capital gains earned.
Seems like an interesting idea, though I get the feeling this is just going to keep inflating property prices right? It's not doing anything to address the increased cost of housing, just helping more people enter the overpriced market.
I see this as a way for the government to earn a quick dollar and de facto get into the housing market.
When the owner buys back the share I doubt it will be calculated at the price the person bought it for. It would be at the market price at the time of the buyback.
I guess it works both ways too? I can see someone buying the minimum 2 percent and if they get something like opal or mascot towers when they sell at a loss the government is the one that loses out. So I can see it as a way to transfer the risk to the government and live in a place without having to pay rent.