Labor's housing scheme questions answered

·2-min read

Labor's housing plan will provide up to 40 per cent equity to help low and middle-income Australians crack into the market, but the proposal has raised a series of questions.

WHAT HAPPENS IF I DIE?

* There are three options if the owner of the house passes away. The house can be sold and the equity will be passed on after the government takes its cut, depending on how much of a stake it has left in the house. If the person's descendants want to keep the house, they can either buy out the government's stake, or if eligible, take over the scheme.

WHAT HAPPENS IF I GET A PAY RISE AND EARN ABOVE THE CAP?

* If you begin earning above the cap, there will be a two year grace period where you can negotiate with the government to buy back more of the house's equity.

WHAT HAPPENS IF I WANT TO SELL MY HOUSE AND HAVEN'T PAID THE GOVERNMENT BACK?

* If you sell the house, the government takes the percentage amount of its stake from the sale price.

WHO PAYS THE FEES?

* The scheme's user pays the fees when buying the house. This is offset by the government not charging the homeowner rent on their portion of the house.

WHAT HAPPENS IF I NEED TO MOVE AND WANT TO RENT OUT MY HOUSE?

* The scheme is designed for users to live in the house and renting is not permitted. But the government will consider allowing the homeowner to rent the house out in exceptional circumstances on a case-by-case basis.

* Moving interstate can count as an exceptional circumstance for an exemption to be provided.

WHAT HAPPENS IF I RENOVATE TO INCREASE THE VALUE OF THE HOME?

* Any renovations will only benefit the owner and an independent evaluation will be undertaken when the property is sold to ensure all capital gains from the renovations go to the owner.

WHAT IF THE HOUSE IS NOT INSURED AND SUSTAINS DAMAGE?

* The home must be insured.

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