2021 Federal Budget Announcements Response
The 2021 / 2022 Federal budget was released on Tuesday evening last week, with a major focus on increasing homeownership. The Federal Treasurer Josh Frydenberg announced three major initiatives that will assist First Home Buyers enter the property market.
Key outtakes for first home buyers included:
Extension to the First Home Buyers Scheme
The ‘First Home Loan Deposit Scheme’ (FHLDS), was introduced in 2020 and is co-ordinated by The National Housing Finance and Investment Corporation (NHFIC).
Borrowers who have saved a deposit as low as 5%, can save on mortgage insurance with the Federal Government providing a guarantee over the loan.
It was announced that the Scheme will be extended by a further 10,000 places in 2021 and 2022.
Family Home Guarantee’
A new initiative announced was the ‘Family Home Guarantee’ which will assist single parents to purchase a home.
Eligible single parents will be able to either build a new home or secure an established home with a deposit of as low as 2%.
The Family Home guarantee will be available from 1 July 2021 for 10,000 buyers over a period of four years.
Applicants who are considered able to manage a mortgage will be able to secure the guarantee.
The First Home Super Saver Scheme
The First Home Super Save Scheme was introduced in 2017, allowing buyers to access funds from their superannuation to buy their first home.
Purchasers can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into their super fund to save for a first home.
The amount that first home buyers can access has been lifted from $30,000 to $50,000. It will begin from 1 July 2022.
Red23 Managing Director Terry Portelli said on these announcements, ‘We were keenly awaiting the Federal Government’s road map for the next year and how the property industry can keep its momentum as we continue to recover from the impacts of Covid-19. With the HomeBuilder Scheme finishing, we are very pleased that these announcements not only support first home buyers experiencing difficulty to save deposits, but also single parent families who find it challenging to purchase a family home. The property industry will continue to be instrumental in keeping people in jobs and provide security in what has been a stressful time for many.’
20 May, 2021