In this article:
Details on Federal government initiatives for single parent households and first time property buyers.
The Federal budget is expected to provide support to homebuyers through multiple schemes and incentives. Here’s our list of the most prominent ones that are likely to have the most pronounced impact.
#1 Family Home Guarantee Scheme
- Single-parent households can purchase property with just a 2% deposit. To be eligible for the scheme, applicants need to have a maximum yearly income of $125,000, should be Australian citizens and over 18 years of age. Single parent households need to prove that they currently do not hold property. However, they are eligible for the scheme if they held property previously. This scheme is expected to come into effect from July 1, 2021, and will have 10,000 places
- Property price caps are different for different states. In NSW, the price cap is $700,000 for any home in a capital city or regional centre and $450,000 for the rest of the state. In Victoria, the price cap is $600,000 for Melbourne and regional centres. For rural Victoria it is $375,000. For Queensland, the price cap is $475,000 in Brisbane and $400,000 in smaller towns. The corresponding figure for Perth, Adelaide and Hobart is $400,000. In ACT, it is $500,000.
#2 New Home Guarantee Scheme
This initiative will allow the purchase of a new property with a 5% deposit. The annual income price cap for singles is $125,000 and $200,000 for couples. The price caps for the New Home Guarantee scheme are higher with Sydney at $950,000 and $850,000 in Melbourne. In Brisbane, it is $650,000. The corresponding figure for Perth, Adelaide and Hobart is $550,000. The scheme is expected to be rolled out by July 1, 2021 and will have 10,000 places.
#3 Super Saver Scheme Contribution Increase
The Super Scheme that was introduced in 2017 allows first home buyers to make contributions to their super that would be taxed at a lower rate -allowing them to save for a home loan deposit faster. Initially, the contribution amount was capped at $30,000 with a contribution limit of $15,000 per financial year. This contribution amount has now been increased to $50,000. For a full guide on the Super Saver Scheme Click HERE.
#4 Extension of First HomeBuilder Grant
The First HomeBuilder grant that provided an amount of $25,000 (later reduced to $15,000) for construction or renovation is not being offered to new applicants. However, the construction or renovation period for existing applicants has been extended by 12 months.
While applying for government grants and schemes can provide immense financial respite for prospective property buyers, it is imperative not to let your eligibility for them interfere with your property selection and purchase process. The most straightforward approach to applying for these schemes and grants is to rely on the professional advice of a mortgage broker. Brokers usually receive a commission from lenders once they settle a loan. Their services are, therefore, generally free for borrowers. In addition to finding suitable government schemes and grants, a broker will assist with the application process and handle all your loan paperwork.
Reach us for the best way forward as per your circumstances.
The information is a compilation from various sources for your benefit and should not be relied upon in lieu of appropriate professional advice.