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The REIA wants first home buyers to be able to write off their mortgage interest rates as a tax deduction.
First home buyers have been flagged as a big priority for the Real Estate Institute of Australia, which has listed the buyer demographic as one of its focuses for the upcoming May 2021 budget.
The new document from the professional body has outlined four priority areas for consideration by the federal government: property customers, first home buyers, investors and agencies.
Four of those directly relate to first home buyers.
The first request from the REIA is to see interest rates for first home buyers made a tax deduction.
According to REIA president Adrian Kelly, implementation of such a scheme would see a benefit of around $4,000 per annum provided to Australia’s first home buyers, and assist approximately 15 per cent of potential buyers, according to figures from the National Housing Finance and Investment Corporation (NHFIC).
Mr Kelly said that at least six other OECD nations have a similar incentive on offer, while the document emphasised such a move “would also mean that market entrants are not considered to be at a disadvantage to investors”.
It’s not the only measure that the REIA wants implemented to assist first home buyers in entering the market, with the president “calling on allowing voluntary super contributions and earnings be used and accessed for all first home buyers”.
According to the REIA, “the lifelong benefits of home ownership are well documented”, with the organisation leaning heavily on the 2020 Retirement Income Review to argue that owning your own home is “the most critical plank” of retirement security.
It’s pointed out programs across Canada, the Netherlands and New Zealand which allow the use of retirement savings for home ownership, and supports expansion of the First Home Loan Deposit Scheme (FHLDS) into a long-term program.
The document also urged that the FHLDS be considered a long-term program in budgetary forward estimates, with the REIA praising the success of the program’s ability to support new entrants into the housing market.
The REIA “strongly believes” additional places should be created, and be able to be accessed by first home buyers looking to move into established dwellings — not be restricted to newly built properties.
The fourth area in which the REIA wants to improve support for first home buyers is associated with the NHFIC. It’s urging the development of a feasibility study that includes transitional lending “as part of its mandate”.
The document argued in the NHFIC scheduled legislative review: “Government should consider whether the scope of NHFIC should include transitional lending to further address first home buyer deposit gaps as has been successful with the Keystart model.”
REB has previously reported on the four REIA priorities which relate directly to real estate agencies. Read the article here.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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