Last year’s Federal Budget was all about getting the housing and construction industry moving. Key measures such as HomeBuilder were deemed a huge success as homeowners and new buyers splashed cash on extensive renovations for their homes.
HomeBuilder is likely partly responsible for the soaring property prices we’ve been seeing across the country of late, with March being one of the most active markets we have seen in 32 years.
With prices growing at a solid rate, it’s no surprise then that this year’s budget has focused more on providing some relief for buyers, particularly first home buyers.
While the new measures may not significantly help out with the issue of housing affordability, it may give some buyers the boost they need.
So what has been announced?
First Home Loan Deposit Scheme
The Federal Government has extended the First Home Loan Deposit Scheme, adding an additional 10,000 places.
The scheme has been hugely popular since it was introduced last year, allowing first home owners to get a foothold in the property market with a deposit of as little as 5%, without the need to pay expensive lenders mortgage insurance (LMI).
The new places will be available on new and existing properties, however property price caps will apply.
Further information about the scheme can be found at www.nhfic.gov.au/what-we-do/fhlds/.
First Home Super Saver Scheme
Another scheme for first home buyers is the First Home Super Saver Scheme.
First home buyers will now be able to release up to $50,000 in voluntary super contributions, up from $30,000.
The changes won’t come into effect until July 1, 2022, however this will give potential first home buyers time to make voluntary contributions if they wish to. Keep in mind however that there are limits on how much voluntary super can be put away each year, without incurring extra tax.
Family Home Guarantee
A newcomer on the block this year is the Family Home Guarantee.
Working similarly to the First Home Loan Deposit Scheme, it will allow single parents with a maximum income of $125,000 to enter the property market with a minimum of a 2% deposit.
The scheme is not limited to first home buyers however, and can be used on new or existing housing as long as the applicant is capable of servicing the loan. Property price caps will apply.
Ten thousand places will be made available over the next four years, with applications to open from July 1, 2021.
Downsizer superannuation contribution
Changes have been made to downsizer superannuation contributions, with the eligibility age dropped from 65 to 60.
While the scheme isn’t specifically aimed at new buyers, the idea behind it is that it will help free up family homes for younger generations.
The scheme works by allowing those eligible to make a one-off, post-tax contribution to their superannuation of up to $300,000 for individuals, or $600,000 for a couple, from the proceeds of their home.