The Federal Government’s co-home ownership scheme has passed Parliament after the Greens agreed to support the measure following a long stand-off.
The “Help to Buy” scheme will split ownership of a property between the Government and a first-home buyer.
It will allow prospective buyers to put down a smaller up-front deposit and make lower repayments than an ordinary home purchase.
Here’s how we got here.
Home purchase
Anyone who wants to buy a home in Australia needs to pay a “deposit” up-front — normally around 20% of the property’s value.
The rest of the purchase can be made with a bank loan that you pay off over time with interest, called a “mortgage”.
According to property data analyst CoreLogic, the national median house price has risen from $552,200 in 2019 to $809,849 in October 2024.
That’s an increase of almost 47% in five years.
Help to Buy
Under the law, a person will pay a minimum 2% deposit to purchase a home. The Government will provide ‘equity’ worth up to 30% of the property’s value, or 40% for new builds.
Equity means the Government will be a part-owner of the property. It’ll also be entitled to up to 40% of a property’s value when it’s sold.
The Government argued the 2% deposit is a more realistic target for many Australians, while the equity would allow owners to apply for smaller mortgages.
The Government introduced its Help to Buy Scheme to Parliament in November 2023. It said 40,000 people would be able to access the scheme over four years.
To be eligible, a person must be a first-home buyer, and must not earn more than $90,000 per year, or $120,000 for couples. If a homeowner’s income increases above these caps, they could be made to repay the Government’s equity.
Area-dependent property price caps (e.g. $950k in Sydney, $400k in regional South Australia) will limit which homes can be purchased under the scheme.
Deadlock
Bills need to pass both the House of Representatives and the Senate to become law. The Government doesn’t have a majority in the Senate.
The Coalition voted against the scheme, meaning the Government needed support from the Greens and a handful of crossbenchers to pass the bill.
The Greens voted against the proposal in the House of Reps, arguing the 40,000-buyer cap would create a “housing lottery” and pit prospective home owners against each other.
Negotiations
The Greens put forward a list of demands for the Government to adopt in exchange for its support to pass the Help to Buy scheme.
Initially, this included reforms to tax discounts for property investors known as “negative gearing” and setting up a public housing developer.
In recent weeks, the Greens reduced their requests to an “immediate construction” of 25,000 social and affordable homes and tweaks to the Help to Buy model to increase access to lower-income earners.
Greens
Yesterday, the Greens announced it would support the Government’s legislation without any changes, ending 12 months of deadlock.
Greens’ Housing spokesperson Max Chandler-Mather said the party agreed to pass the bill “after accepting Labor doesn’t care enough about renters to actually do anything meaningful for them.”
“We have pushed as hard as possible to get Labor to do more than tinkering around the edges of this devastating housing crisis,” Chandler-Mather said.
Government remarks
Housing Minister Clare O’Neil said the Greens had folded after “a year of delay and blocking” the bill, which she called a “bold and ambitious” housing reform.
“I’m really pleased that the Greens have finally seen the light,” O’Neil said.
The bill has now passed the Senate, meaning the scheme can be set up once the Governor-General formally signs it into law.
