First Home Buyer Policies: What the Major Parties Are Offering in the 2025 Federal Election

As Australians prepare to vote this weekend on May 3rd, housing affordability remains one of the election's most critical issues. With Gen Z and Millennials set to outnumber Baby Boomers at the ballot box for the first time in every state and territory, parties are focusing heavily on first home buyer policies. Here's what the major parties are promising:

Labor's First Home Buyer Policies

The Albanese Government has committed to several initiatives aimed at helping first home buyers:

• 5% Deposits for All First Home Buyers: Labor plans to expand the Home Guarantee Scheme to all first home buyers, removing income tests and caps on availability. This would enable more buyers to purchase homes with just a 5% deposit without paying Lenders Mortgage Insurance. The ALP have also promised to raise property price limits under these schemes; In Brisbane, the cap would increase from $700,000 to $1,000,000 and in other areas of Queensland, it would go up from $550,000 to $700,000
• Help to Buy Scheme Enhancement: The Help to Buy Scheme was passed by the Senate late last year; its a program that allows the government to take an ownership stake of up to 40% in new homes and 30% in existing properties, enabling buyers to enter the market with just a 2% deposit. Labor's 2025 budget commits an additional $800 million to the program. Additionally, income thresholds and property value limits were both increased, making the scheme more accessible. 
• New Housing Construction: Labor has pledged $10 billion to partner with state developers and industry to build up to 100,000 homes reserved exclusively for first home buyers.
• HECS Debt Consideration: The ALP has said they would pressure banks to exclude HECS debts from mortgage application calculations should they be re-elected. 

Coalition's First Home Buyer Policies

The Coalition's approach includes tax incentives and superannuation access:

• Mortgage Interest Tax Deductions: The proposed First Home Buyer Mortgage Deductibility Scheme would allow first home buyers of new properties to claim interest paid on the first $650,000 of their mortgage as a tax deduction. For someone earning $120,000 with a $650,000 mortgage, this could mean savings of approximately $12,000 annually. Note that this would only be applicable for newly built properties, and there is an income threshold of $175,000 a year, or $250,000 for a couple. 
• Superannuation for Housing: First home buyers would be permitted to access 40% of their superannuation (up to $50,000) for a home deposit, with the funds to be repaid when the property is sold.
• Home Guarantee Scheme Continuation: The Coalition would maintain the current 5% deposit program for first home buyers and the 2% deposit scheme for single parents. Income testing for these schemes would increase to $175,000 for singles and $250,000 for joint applicants—a $50,000 increase from current caps. They too will broaden the availability of the scheme to be unlimited. 

The Greens' Housing Platform

The Greens' approach focuses on market regulation and public housing:

• Negative Gearing Reform: They have put forward limiting negative gearing benefits to no more than one investment property, which must have been purchased before the purposed legislation passes.
• Capital Gains Tax Reform: The party advocates for new limits on CGT discounts.
• Public Housing Initiative: The Greens want to establish a public property developer to build 360,000 homes over five years.
• Rent Control Measures: They support freezing rents and capping future increases.
• HomeKeeper Mortgage Program: The party proposes a discounted mortgage program available to all homeowners, including first-time buyers.

What's Not Changing

Both the ALP and LNP have ruled out changes to negative gearing and capital gains tax in their current proposals.

With housing affordability continuing to challenge many Australians, particularly younger generations entering the market, these policies could significantly influence voter decisions at the polls this weekend.

The team at Loan Market Edge is committed to helping clients navigate these potential policy changes. Contact our Gold Coast or Townsville offices to discuss how these proposals might affect your home buying journey.