Announcement date
25 August 2025
Link to announcement
https://www.legislation.gov.au/F2025L00984/latest/text
Problem being addressed
Home ownership rates have been falling in Australia over recent decades. Between 1994 and 2021, rates of home ownership declined from 71.4 per cent to 66.3 per cent. The ratio of housing prices to household disposable incomes has increased substantially in Australia over recent decades. The ‘deposit hurdle’ – the challenge of accumulating a sufficiently-sized deposit to purchase a home – has grown significantly. A broad range of households, particularly younger cohorts, face challenges in saving a deposit.
Proposal
The Home Guarantee Scheme (HGS) assists individuals into home ownership by providing a government guarantee of up to 15 per cent (or 18 per cent for the Family Home Guarantee). The proposal is to expand Government support through HGS to all first home buyers, by uncapping the number of scheme places available, removing existing income caps for applicants and partners, and increasing property price caps.
Assessed Impact Analysis outcome
Impact Analysis Equivalent
Assessment comments
The Office of Impact Analysis (OIA) does not assess the quality of reviews and documents used in lieu of an Impact Analysis (IA). Impact Analysis Equivalents (IAE) are assessed by OIA for relevance to the recommended option(s) and for the coverage of the seven Impact Analysis questions conducted. In this case, the OIA’s assessment is that the option analysed in the IAE is sufficiently relevant to the regulatory proposal. The IAE contains additional analysis prepared by the Department of the Treasury (the Treasury) to further address IA question 4.
For this IAE, the Treasury has drawn on the 2022 Home Guarantee Scheme Impact Analysis along with additional analysis on the impacts of the proposal, including on lenders mortgage insurance providers, small and regional banks and on low-income buyers. The OIA assessed that the option analysed in the IAE materials is sufficiently relevant to the proposal.
Regulatory burden
The Treasury estimates the proposal will increase average regulatory costs by $5.38 million per year, over ten years.