iscoverAn accountant has called the Albanese government’s first home buyer five per cent deposit scheme a destructive mechanism to personal wealth and national productivity.
‘We’ve lost the plot’: Accountant slams first home buyer 5% deposit
12 September 2025
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9 minute read
Following the government’s announcement to introduce 5 per cent deposits for all first home buyers starting on 1 October 2025, opinions have been both conflicted and divided.
Nitin Saby, former ATO director, took to LinkedIn to share his professional view and opinion on that matter, outlining the negative impact it could have on the wealth of younger Australians and potential tax implications.
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In his post, Saby said: “If Australia thinks a 5 per cent deposit is best spent on a house instead of a business, we’ve lost the plot.”
“The so-called ‘leg-up’ for young Australians is nothing more than a leg-up into 30 years of debt in one of the most overheated property markets in the world,” he said.
“It doesn’t create new industries. It doesn’t spark exports. It doesn’t boost productivity. All it does is keep housing prices inflated and keep younger Australians chasing the same patch of land at ever-higher prices.”
The Albanese government revealed the early start of the program with the idea that the initiative would shave years off the time it took to save for a deposit, as well as save tens of thousands of dollars on lenders mortgage insurance.
“In the first year alone, first home buyers using the scheme are expected to avoid around $1.5 billion in potential mortgage insurance costs,” Labor said back in August.
The scheme looked to guarantee a portion of a first home buyer’s home loan to enable them to purchase with a lower deposit, with no caps on places, no income limits and property price caps to provide a greater variety of homes.
According to Saby, the “kicker” of the scheme came in if someone tried to use their home as a base for a business, as they would be faced with zoning rules, permits, insurance hikes and tax complications such as partial loss of the CGT main residence exemption.
Saby said this referred to the idea that the government would subsidise debt to “buy bricks”, but punish people for turning those bricks into a hub of enterprise.
“Imagine if the 5 per cent deposit guarantee applied to starting a business. A credible plan could unlock government-backed capital, simplified tax treatment for home-based enterprises and procurement pathways to actually sell into government supply chains,” Saby said.
“This would seed new industries, create jobs and put Australia back on the path to true economic dynamism.”
From sharing his professional opinion, Saby’s post received over 130 reactions and attracted almost 50 comments, all in agreement that the scheme would not create as many positive impacts as expected or advertised.
NAB premier banker Hayden Way said the 5 per cent deposit sounded like a dream, but in reality, this dream ended when first home buyers started paying a premium just to “win keys”.
“On paper, that looks like a win for first-home buyers. But more buyers, plus the same number of houses equals bigger bidding wars,” he said.
“It’s not a shortcut; it’s just fuel on the fire. Sure, the obvious answer is to build more homes, but supply isn’t keeping up.”
Saby said if the government continued to reward property speculation over entrepreneurship, Australia risked becoming a nation of landlords, not innovators.
“Property might be the great Aussie wealth machine, but it’s not innovation. It doesn’t invent, it doesn’t compete globally and it doesn’t create the next generation of jobs. It just widens the gulf between those who own and those who never will.”
“The bigger picture is dangerous. We’re teaching a generation to tie themselves to mortgages, not opportunities. We’re funnelling billions into non-productive speculation while underfunding the very startups that could make Australia competitive beyond mining and property.”
“The result? Rising inequality, lower productivity and a culture where risk-taking is crushed under the weight of housing debt.”
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