Coalition announces First Home Buyer Mortgage Deductibility Scheme

The Coalition has announced that, if elected to Government, first home buyers will be able to claim a tax deduction on mortgage interest payments for new build homes under a new First Home Buyer Mortgage Deductibility Scheme, which will include the following aspects: 

• First home buyers who purchase a newly built home as their principal place of residence will be eligible. 

• Buyers can deduct the interest paid on up to $650,000 of their mortgage from their assessable income. 

• There is no cap on the overall mortgage size or home price, but only the interest on the first $650,000 of the loan will qualify for deductions. 

• The measure will be available to individuals earning up to $175,000 and joint applicants earning up to $250,000 (once eligible, participants will retain access to the deduction even if their income rises). 

In addition, the Coalition has proposed the following changes to the Home Guarantee Scheme: 

• The income cap for individuals will increase from $125,000 to $175,000 

• The income cap for joint applicants will increase from $200,000 to $250,000 

• The property price caps will increase  

• The number of places under the First Home Buyer Guarantee and Regional First Home Buyer Guarantee will be uncapped