$1K Tax deduction and 5% house deposits promised by labour

If Labor wins another term, every Aussie taxpayer could soon be looking at an automatic $1000 tax deduction, no receipts or accountant required. Prime Minister Anthony Albanese dropped the news today at his official campaign launch in Perth, packaging it with a fresh set of cost-of-living policies to match the Coalition's recent economic pitches.

A quick and easy $1000 tax break

Albanese said this $1000 instant tax write-off is all about cutting red tape and getting people their money faster. You won’t need to hunt down receipts or dig through online banking records—just tick a box, and you’re done.

“This will guarantee everyone can opt for an automatic tax deduction of $1000 on their work expenses,” he said. “No paperwork. No hassle.”

The PM added that for those who usually claim more than $1000 in work expenses, the regular claim process will still be available. But for millions of Australians, this streamlined option could save time and effort—and the government says nearly six million people will benefit. The deduction could kick in as soon as July 1, 2026, and the average annual tax relief is expected to be around $205.

“We’ve already delivered a tax cut for every taxpayer,” Albanese said, “and now we’re making it easier to get more back at tax time too.”

Helping first homebuyers with 5% deposits

Labor’s also zeroing in on the housing crisis with a big pitch for first homebuyers. If re-elected, the government plans to expand the existing 5% deposit scheme—and scrap Lenders Mortgage Insurance (LMI) while they’re at it.

Right now, buying with less than a 20% deposit usually means paying thousands in LMI. Under Labor’s plan, the government would cover that cost entirely.

“You won’t have to pay a single dollar in mortgage insurance,” Albanese said. “Our government will cover it.”

Labor also wants to raise the property price caps to better reflect actual market prices. In Sydney, the cap would jump from $900,000 to $1.5 million; in Melbourne, from $800,000 to $950,000. They’d also remove income tests, making the scheme more widely accessible.

So, for example, under the plan:

• A Sydneysider could buy a $1 million apartment with just a $50,000 deposit

• A Queenslander could buy an $850,000 home with a $42,000 deposit

Labor says this will save buyers around $23,000 in LMI and shave years off the time it usually takes to save a deposit.

Big investment in new homes

And to top it off, Labor’s pledging $10 billion to build 100,000 new homes, all reserved for first homebuyers. That includes:

• $2 billion in grants

• $8 billion in zero-interest loans or equity partnerships

Housing Minister Clare O'Neil said this was about easing the pressure on young Australians struggling to get into the property market.

“We want to help young Australians pay off their own mortgage, not someone else’s,” she said.

If Labor wins the next election, all of these changes could start rolling out from January 1, 2026.

Between the streamlined tax deductions and first homebuyer support, Labor's clearly aiming to pitch itself as the party of practical economic relief—putting more money in people's pockets and helping them get a foot in the door of the property market.