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A few home truths about building a home and all that surrounds it.

What you need to know about Federal Budget 2021/22 - New Home buyer programmes

19/06/2021


In May 2021,  Treasurer Josh Frydenberg announced the Federal Government’s budget, with new measures to incentivise people to build and buy homes to keep the economy powering ahead during the pandemic.
 
The Budget follows the recent announcement to extend the construction commencement requirement for HomeBuilder to 18 months for all existing applicants. The extension was designed to take stress off people who recently signed up to build a new home but due to high demand were worried if it would start in time. It is hoped the decision will also take some of the pressure off building supplies and trades.


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The Budget announcements build on the extraordinary success of the HomeBuilder Grant.
 
See below more detail about all what the Government has promised to deliver this FY to improve opportunities for home ownership across Australia.

1. The new Family Home Guarantee to help support single parents

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The objective is to make it easier for single parents to get into home ownership. This program is also being referred to in the media as, Single Parent Home Buying Scheme and Single Parent Deposit Schemes.

What: 10,000 guarantees made available to over four years to single parents with dependants. The property price thresholds to access this scheme will also be updated and increased across select states (see below).

This will allow successful applicants to purchase a home sooner with a deposit of as little as 2 per cent.

Who: Single parents with dependants will be eligible.

For details on how to apply, eligibility requirements and the participating panel of lenders head to the NHFIC website.

Family Home Guarantee property price caps, effective 1 July 2021

State Capital City Rest of State
NSW $800,000 $600,000
VIC $700,000 $500,000
QLD $600,000 $450,000
SA $500,000 $350,000
WA $500,000 $400,000
TAS $500,000 $400,000

Source: NHFIC Website - https://bit.ly/3gNCovQ
 

2. The expansion of the New Home Guarantee

The objective is to continue this measure into a second year to make it easier for first home buyers to purchase a new home. This program is also being referred to in the media as; Low Deposit New Home Guarantee Program.

What: Provide an additional 10,000 places in 2021-22.

Who: First home buyers seeking to build a new home or purchase a newly built home will be able to do so with a deposit of as little as five per cent.

For details on how to apply, eligibility requirements and the participating panel of lenders head to the NHFIC website.
 
New Home Guarantee property price caps, effective 6 October 2020

State Capital City Rest of State
NSW $950,000 $600,000
VIC $850,000 $550,000
QLD $650,000 $500,000
SA $550,000 $400,000
WA $550,000 $400,000
TAS $550,000 $400,000

Source: NHFIC Website - https://bit.ly/3gNCovQ


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3. The First Home Loan Deposit Scheme extended

The objective of this scheme is to help first-home buyers get a faster leg up on the property ladder by avoiding paying lenders’ mortgage insurance, even with a deposit as low as 5 per cent.
Lenders mortgage insurance is a form of insurance that the lender takes out to cover the risk of the borrower being unable to repay the mortgage. They of course then charge the borrower.
Most banks and lenders require a minimum deposit of 20 per cent of the property’s value for the borrower to be exempt from lenders mortgage insurance so getting access to the new government scheme can make a big difference – the government says you could save around $10,000. Under the scheme, the Government goes guarantor for the rest of the deposit, in effect allowing people to take out low-deposit loans and not spend extra years saving for a 20 per cent deposit.  

What:  Provide an additional 10,000 places in 2021-22.

Who: Exclusively for first home buyers who are current Australian citizens and meet the scheme's eligibility criteria.  There is also a price cap on the value of homes that can be purchased. 

For details on how to apply, eligibility requirements and the participating panel of lenders head to the NHFIC website.
 

First Home Loan Deposit Scheme property price caps, effective 1 July 2021
State Capital City Rest of State
NSW $800,000 $600,000
VIC $700,000 $500,000
QLD $600,000 $450,000
SA $500,000 $350,000
WA $500,000 $400,000
TAS $500,000 $400,000
Source: NHFIC Website - https://bit.ly/3gNCovQ


4. First Home Super Saver Scheme increased to $50,000

The objective is to increase the amount of superannuation that can be used to purchase a first home.

What: The maximum amount of voluntary super contributions that can be released has increased from $30,000 to $50,000.

Who: Young first home buyers who are choosing to access their super now, rather than wait until retirement. Super is used as an investment in the home. More criteria to be announced shortly by the Government.


5. Change in eligibility for Downsizer contributions to Superannuation Scheme

The objective of this change is to encourage younger retirees to sell their large family home to deposit funds into their superannuation. This is designed to encourage more large homes to be sold to make room for young families.

What: The scheme currently allows people aged 65 and over who sell the family home to make a one-off $300,000 contribution to their super, outside the concessional and other rules. Couples can contribute $300,000 each

Who: The age eligibility has now been lowered to people aged 60 and over. More criteria to be announced shortly by the Government.


 

For more information head to the below links:

Federal Governement media release on New Property Price Caps for First Home Loan Deposit Scheme and Family Home Guarantee

Federal Housing Minister's press release on support for first home buyers and single parents with children 

The Federal Budget press release from the Federal Housing Minister