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Tuesday, 23 August 1983
Page: 63

Mr HURFORD (Minister for Housing and Construction and Minister Assisting the Treasurer)(10.02) —I move:

That the Bill be now read a second time.

This Bill will modify from 1 October 1983 the terms on which an income tax rebate is available to home buyers during the first five years of occupation of a sole or principal residence in Australia. The change was announced in the 19 May economic statement, as part of an overall package of housing measures. In particular, it was announced then that there would be a new cash subsidy scheme which would provide assistance to first home buyers, on an income tested basis, from 1 October 1983. The schemes of assistance for home buyers introduced by the previous Government had been neither efficient nor effective in targeting assistance to those in most need and in providing a stimulus to the housing industry. One of those schemes, which provided a tax rebate on the portion of interest payments that exceeded 10 per cent per annum on loans of up to $60,000, was terminated with effect from 1 July 1983.

The other tax rebate scheme, which applies only to first home buyers, is to be modified by this Bill so that, subject to a transitional measure, there will be no new entrants to the scheme after 30 September 1983. After that date prospective first home buyers will come within the new first home owners assistance scheme, which will have the effect of making home ownership an attainable goal of many more Australian families. Home buyers who first occupy their sole or principal residence by 30 September 1983 will remain entitled to a tax rebate on home loan interest payments during the first five years of ownership, subject to an income test.

Under the income test, benefits will be available in full to taxpayers whose family income in the 1982-83 income year does not exceed $24,300. Where a taxpayer's family income in that year exceeds $24,300 the rebate will be shaded out progressively, finally cutting out at $27,900. In applying the income test, family income will be taken to be the combined taxable income of the taxpayer and, where relevant, of the person who is the taxpayer's spouse on 1 October 1983. For the 1983-84 income year, of course, only the rebate entitlement for the period after 30 September 1983 will be income tested.

Although, as a general rule, there will be no new entrants to the rebate scheme after 30 September 1983, taxpayers who contract to acquire or build or commence to build by that date will be brought within the scheme even though they occupy the home after 30 September. This transitional measure to extend entry into the scheme will protect those first home buyers who will not be eligible for assistance under the proposed first home owners assistance scheme that I referred to earlier. Without this extension of the rebate some lower income first home buyers would not be entitled to the benefits of either scheme. In applying the income test in these cases, family income will be the combined taxable income of the taxpayer and, where relevant, of the person who is the taxpayer's spouse when the home is first occupied. A memorandum explaining the technical features of the Bill is being made available to honourable members. I commend the Bill to the House.

Debate (on motion by Mr Shipton) adjourned.