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Federal Budget 2021-22: Good News for Home Buyers
On the 11th of May, the federal government unveiled its 2021-22 budget. The budget includes a range of government programs that are designed to support Australia’s economic recovery following a tough few years.
With schemes like last year’s Home Builder Grant being instrumental in managing the country’s economic downturn, the government has again introduced spending that encourages buyers to enter the property market.
Outlined in the budget are four key items that will make it easier than ever for Australians to get into their own homes.
Expanding the New Home Guarantee
For the second year in a row, the New Home Guarantee (also known as the First Home Loan Deposit Scheme) has been expanded to offer a further 10,000 places.
Under the scheme, eligible first home buyers can make their purchase with a deposit of as little as 5%. The New Home Guarantee only applies to first home buyers who meet the scheme’s lending criteria and who are looking to build or purchase a newly built home.
Family Home Guarantee for single parents
Single parents know how tough it can be to save a large deposit when buying a home. This year’s budget announced the Family Home Guarantee which seeks to make it easier for them to join the property market.
The government is guaranteeing 10,000 places over the next four years that will help eligible single parents build or purchase an existing home with a deposit as low as 2%. Applications will be subject to special schemes and lending criteria.
First Home Super Saver scheme increase
This year, to help first home buyers raise larger deposits, the First Home Super Saver (FHSS) scheme has been expanded from $30,000 to a maximum of $50,000.
Using the FHSS means first home buyers can make voluntary contributions to their super which can then be released back to them when they’re ready to buy. Your contributions under the scheme will accrue income in your super fund which will also be released to you when you purchase your first home.
Changes to the Downsizer contributions scheme
The Downsizer scheme allows older Australians to sell their home and make a one-off voluntary super contribution of up to $300,000. In the 2021-22 budget the minimum age for eligibility under the Downsizer scheme has been lowered to 60 years old.
Couples can each contribute $300,00 to their own fund, even where the house was only in one person’s name. The scheme is designed to encourage retiring Australians to downsize the family home and free up larger properties for younger Australians to buy.