The BUDGET! What it means for home buyers
Last night the Government handed down its 2021 -22 Federal Budget which included home buyer initiatives targeted at specific groups. This comes off the back of the highest levels of first home buyer activity in 15 years.
So what are the Federal Budget initiatives - and will they affect you?
Family Home Guarantee
For 10,000 eligible single parents with dependents, the Family Home Guarantee will give them the opportunity to buy a new or established home with a deposit as little as 2%, avoiding the added cost of Lenders Mortgage Insurance (LMI). Appreciating the difficulty of many single parents to save the required deposit to buy a home, the government will guarantee up to 18% of the property purchase price for participating single parents opening up the possibility of buying with as little as 2% deposit.
The important point to note is that the single parent need not be a first home buyer; the guarantee is available to single parents who are first home buyers or those who have previously owned before. To be eligible a single parent must not earn more than $125k with purchase price limits applying across Australia.
First Home Loan Deposit Scheme (FHLDS)
A further 10,000 places in the FHLDS will be opened up come 1 July for First Home Buyers Australia wide to build a new home or buy a newly constructed home with as little as 5% deposit. The places in the scheme will be made available on a first come first served basis through one of the 27 participating lenders.
The extension of the FHLDS continues to focus on new homes only and does not apply to the purchase of an established property.
First Home Super Saver Scheme
Previously with a limit of $30k, first home buyers will now be able to make voluntary contributions up to $50k into their Superannuation fund with the intention of growing their deposit faster than by usual means saved in a bank account. First Home Buyers will then be able to withdraw their contributions plus a deemed rate of earnings to help in buying their first home.
Superannuation contributions are personal contributions that are made by the first home buyer themselves and does not include those made by an employer into your fund.
To discuss any of these Federal Budget initiatives, please contact me.