As the 2025 federal election approaches, both Labor and the Coalition have unveiled housing policies that could reshape Australia’s property market.

Opposition Leader Peter Dutton’s Coalition policy offers a significant incentive for first-home buyers of new builds: a tax deduction on interest paid on the first $650,000 of a mortgage for up to five years.

The scheme is means-tested, $175,000 for singles and $250,000 for couples, and is projected to cost $1.25 billion.

For investors, this could drive demand in the new build sector, boosting off-the-plan sales and encouraging development in growth corridors.

Prime Minister Anthony Albanese’s Labor government counters with a broader, supply-focused strategy.

Labor plans to expand the First Home Buyer Guarantee by removing income limits and increasing property price caps (e.g. Sydney: up to $1.5 million).

Crucially, it also pledges a $10 billion investment to construct 100,000 homes for first-home buyers, $2 billion in grants and $8 billion in zero-interest loans.

These homes will be built on underutilised government land, with access managed in collaboration with state governments.