The news from the 2022 Federal Budget is that there are some wins for home buyers. The Government’s announcement of a new Regional Home Guarantee, as well as the addition of available places under other existing schemes, are designed to give aspiring home owners a helping hand as they embark on their property-buying journey.
Regional Home Guarantee offers incentives to buy regionally – and save
Australian citizens and permanent residents who are new home buyers or who have not owned property for at least five years will have the opportunity to participate in the Regional Home Guarantee scheme which is designed to encourage eligible buyers to purchase a newly built home or build their own home in regional areas across the country.
Eligible buyers can apply to the scheme to access a home loan with a deposit as low as five per cent of the property price and still avoid the extra expense of mortgage insurance. Instead, the government will act as guarantor for up to 15 per cent of the deposit for capped loans approved under the Regional Home Guarantee incentive – a move that aims to give people a more accessible entry point to home-ownership and boost home-building in regional areas.
From 1 October 2022 until 30 June 2025, 10,000 places will be made available each year under the scheme.
Added places to existing schemes give buyers greater access to low-deposit home loans
In other Federal Budget news aimed to assist first-home buyers, additional places will be made available to the existing First Home Loan Deposit Scheme (now re-named as the First Home Guarantee Scheme), as well as added support for single parents through the Family Home Guarantee scheme.
From 1 July 2022, 35,000 new First Home Guarantee places will be offered each year, for three years until June 2025.
Single parents are also being offered an additional financial lifeline in the Federal Budget announcement, with an additional 5,000 spots available to them each year, under the specifics of the Family Home Guarantee that was first introduced in July 2021. The Family Home Guarantee aims to support eligible single parents with dependants by enabling them to access a home loan with a deposit of as little as two per cent, whether they are first-home buyers or previous home owners. It’s important to note that this scheme does not offer support to people buying investment properties.
Expansion of schemes offer low-deposit loans but do not address potential for rising interest rates
The expanded schemes – offering 20,000 more places across the different schemes than were offered in the previous financial year - will cost the Federal Government $8.6 billion over four years. Critics say that it does not address the potential that rising interest rates may have on the already-inflated housing market.
For those keen to reduce their saving time and find a way to get out of the increasingly expensive rental market, though, the schemes offer eligible applicants’ greater opportunities to explore options to buy properties sooner, rather than later.
According to Federal Treasurer, Josh Frydenberg, the Budget’s announcements of ways first-home buyers can access property faster is something that reinforces how important home ownership is to so many Australians. “Helping more Australians to own a home is part of our plan for a stronger future,” he said in his Budget speech to parliament.
Whether you agree with the politics or not, seeing if you are eligible to access the schemes and boost your own potential to buy your own home faster, may be the best move you can make.
To find out more about the conveyancing support you need to buy your own Australian property, talk to our experienced, reliable team at Conveyancing.com.au today.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.