This year’s federal budget brings good news for prospective homeowners, with a series of new and extended measures designed to help people enter into the property market. Keep reading for our breakdown of what the federal government has included in the budget for homebuyers.
A guide to deposits, pre-approval, & choosing the right property.
The newest scheme targeted at home ownership is the Family Home Guarantee, a measure specifically for single parents with dependents wanting to get into the housing market. The scheme gives 10,000 single parents the opportunity to build a new home or purchase an existing home with a deposit as little as 2%, without paying Lenders Mortgage Insurance (LMI). Under the Family Home Guarantee, the government will guarantee up to a maximum of 18% of the home’s purchase price.
The scheme is part of a number of measures in Tuesday’s budget aimed at helping women’s economic security, with the majority of single parents in Australia being women. The scheme is also not limited to first home buyers, meaning single parents who have previously owned a home are eligible.
To be eligible for the Family Home Guarantee, applicants must be Australian citizens, over the age of 18 and have an annual taxable income not exceeding $125,000.
The construction commencement period for existing applicants to the HomeBuilder scheme has been extended by 12 months under this year’s federal budget. Introduced as part of last year’s budget, HomeBuilder offered $25,000 grants to build a new home or renovate, with a minimum spend of $150,000 required to be eligible.
The program stipulated that construction on the new build or renovation must commence within 6 months of the contract date, but this has now been extended to 18 months.
Applications for HomeBuilder have now closed, meaning this extension is for existing applicants only.
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10,000 extra places will be added to the New Home Guarantee for 2021/2022 as part of a boost for first home buyers wanting to get into the housing market. The guarantee was introduced in last year’s federal budget to help first home buyers purchase a new home with a deposit as low as 5%.
Eligible first home buyers must purchase a newly built property or build a new home to access the guarantee, meaning existing properties are excluded.
Eligible first home buyers can now release up to $50,000 in voluntary super contributions to put towards a deposit for a home, which is an increase from the $30,000 limit under the First Home Super Saver Scheme. The scheme excludes super payments made by your employer or spouse.
The First Home Super Saver Scheme helps borrowers save money to grow a home deposit by using their superannuation fund. Borrowers get to benefit from the lower rate of tax applied to their super account.
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The Low and Middle Income Tax offset introduced in last year’s budget has been extended for another 12 months under the 2021 federal budget. For prospective home buyers, these tax cuts could contribute to your deposit or your future home repayments.
See the table below for an idea of how much you could save:
|$37,000 or less||$225|
|$37,001 to $48,000||$255 plus 7.5 cents for every $1 above $37,000 (up to a max of $1,080)|
|$48,001 to $90,000||$1,080|
|$90,001 to $126,000||$1,080 minus 3 cents for every $1 of the amount above $90,000|
If you’re looking to buy a home and you have questions about what government schemes and grants you could be eligible for, feel free to speak with a Lendi Home Loan Specialist at a time that suits you.
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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.
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