The Federal Government announced a number of new initiatives in its 2021- 2022 Budget to support first home buyers trying to Australia’s red-hot property market.
Treasurer Josh Frydenberg told the parliament that “under the Coalition, homeownership will always be supported”.
He announced three key measures aimed at helping first home buyers enter the market without having to save for decades to acquire a sizable deposit.
First Home Loan Deposit Scheme
The Federal Government is expanding the First Home Loan Deposit Scheme by another 10,000 places in 2021-2022.
Under the scheme, a first home buyer who secures one of the 10,000 places will only need a five percent deposit with the government acting as guarantor for the remaining 15 percent.
The scheme will see first home buyers avoid paying lender’s mortgage insurance (LMI), but they will have to eventually repay the 15 percent the government covered at the time of purchase.
The idea is to help young people enter the market sooner as rising house prices rapidly eclipse a person’s ability to save for a deposit.
First introduced in last year’s Budget, the First Home Loan Deposit Scheme has proved to be enormously popular with almost all spots secured soon after becoming available.
First Home Super Saver Scheme
The First Home Super Saver Scheme has been expanded to allow eligible first home buyers to access up to $50,000 from their superannuation fund to purchase a home.
The scheme will begin from July 1, 2022.
More information about the scheme is available on the website of Australian Taxation Office
Family Home Guarantee
The “Family Home Guarantee” is aimed at helping single parents with dependant children to buy a home, regardless of whether that single parent is a first home buyer or previous owner-occupier.
Under the guarantee, eligible single parents will be able to build a new home or purchase an existing home with a deposit of as little as two percent.
Applicants must be Australian citizens, at least 18 years of age and have an annual taxable income of no more than $125,000. A fact sheet with further information on eligibility criteria will be available on the website of The National Housing Finance and Investment Corporation (NHFIC) in the coming weeks.
The guarantee will be open for applications from July 1, 2021 and will offer 10,000 places over four years.
Only individuals who are deemed to be able to service a loan will be granted a place.
Federal Budget 2021: Housing (Graphic: Tara Blancato)
Source: 9 News