Labor will shave hundreds of thousands of dollars off the cost of buying a home, in a shared equity pledge set to be a cornerstone policy of its campaign.
Unveiled on the morning of its campaign launch in Western Australia on Sunday before the May 21 election, the Opposition will seek to introduce the "Help to buy" scheme in a bid to ease house price affordability.
The scheme involves a shared equity arrangement where up to 40 per cent of the dwelling value is purchased by the federal government, potentially saving up to $380,000 on a loan.
Labor's key housing policy will also include reduced deposit hurdles with as little as 2 per cent, which allows a buyer to avoid lenders' mortgage insurance.
The package is set to cost taxpayers $329 million over four years, and target low- to middle-income earners.
Labor leader Anthony Albanese is poised to address the campaign launch with this policy, saying it will be the Opposition's remedy to fixing housing affordability across the nation.
"After nine long years in government, housing affordability has only got worse under the Liberal-National government," Mr Albanese said.
"Help to buy is part of Labor's plan to tackle the housing crisis."
Prospective home buyers seeking a new build home will be able to attain 40 per cent stake from the Commonwealth, while an existing dwelling can garner a shared equity arrangement of 30 per cent.
Caps also apply to the proposed scheme, with Canberrans looking to buy able to purchase a property under $600,000, while Sydney and other major regional NSW regional centres will have buying limits of 950,000.
An ACT resident under the scheme could save $240,000 on a new build and $180,000 on an existing dwelling.
The move is set to win voters feeling the pinch from rising property prices and comes in response to falling home ownership levels across the country among younger low- and middle-income earners.
According to The Grattan Institute, home ownership among younger Australians on low to middle incomes has dropped from 60 per cent to 28 per cent over the last four decades.
Labor's housing pledge will be open to singles with a taxable income of up to $90,000, and $120,000 for couples.
It will only be open to Australian citizens who do not currently own a property.
Labor's campaign spokesman Jason Clare said part of the scheme's design was to make mortgages smaller for people trying to buy in a hot market.
"It's harder to buy, harder to rent and there are more homeless Australians than ever before," he said.
"This will help a lot of Australians buy a home with a smaller mortgage that they can afford to repay, instead of renting for the rest of their lives."
A buyer using the scheme would not have any obligation to pay back the government, but would be able to make contributions to reduce its equity stake.
Labor claims the money will be recouped by the government following a property sale and it will make profit on the capital gains.
Labor's proposal is separate to other existing loan schemes offered by the government, which just look at reducing the deposit scheme.
Home guarantee schemes have faced recent criticism over the additional debt it places on a mortgage-holder.
These concerns are in the wake of rising inflation and cost of living pressures, which are touted to be exacerbated by interest rate hikes set to come into effect in the next month.
Annual inflation surging to 5.1 per cent has prompted speculation the Reserve Bank could begin lifting rates this coming Tuesday.
Rising inflation has particularly hit staple goods such as groceries and petrol.
On Saturday Mr Albanese said Australians would be better under a Labor government, but was unable to quantify by how much prices would drop. He said Labor's pledges to reduce the cost of healthcare, housing, childcare and education would alleviate rising costs facing households.
Labor's treasury spokesman Jim Chalmers in his rebuttal said Prime Minister Scott Morrison was failing to take accountability.
"He takes no responsibility and when times are tough," Dr Chalmers said.
"He wants to pretend now that he has absolutely nothing to do with this cost of living prices."
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