How to Take Advantage of the Government’s Incentives for First Home Buyers
Just the thought of buying a home seems ridiculous in this economy. House prices have spiked significantly following COVID-19, lots of people have lost their jobs and we all like our avocado toast.
But a couple of things from the 2021 federal budget today might actually make buying a home a little bit easier. Let’s break them down and see how you can best make use of the government’s offerings.
First Home Loan Deposit Scheme
The federal government announced 10,000 extra places for the First Home Loan Deposit Scheme (FHLDS) in the 2021-2022 financial year, for new homes. This covers those planning to buy a newly constructed home, property off the plan, house and land package or land and separate building contract.
This scheme allows first home buyers to purchase a new home with a deposit of only 5%, where typically 20% would be needed. A similar scheme is available for those looking to buy existing homes.
Participants need to go through a range of eligibility checks such as an income test, minimum age test, prior property ownership test and proof you can satisfy the deposit requirements.
Find out more about the scheme here and check your eligibility here.
Family Home Guarantee
The Family Home Guarantee is aimed at single parents. It is similar to the FHLDS in that it allows single parents with dependants to build or purchase a home with a deposit of only 2%. It applies regardless of whether the parent is a first home buyer or not.
10,000 places in this scheme will be made available over the next four years. Applicants must be Australian citizens, at least 18 years of age and have an annual taxable income of no more than $125,000.
More details will be made available about this scheme in the coming weeks. In the meantime, you can read what’s been announced here.
First Home Super Saver Scheme
The First Home Super Saver Scheme is a leg-up for first home buyers wishing to save for a house deposit quickly. This scheme allows individuals to make voluntary pre or post-tax contributions into their super fund with the intention to save for a home.
They are then able to release portions of their super to put towards their home purchase. The government has updated this scheme by changing the allowance of releases from $30,000 to $50,000, which will come into effect July 1, 2022.
Once they’ve saved enough, first home buyers are then able to release their contributions and associated earnings from their super fund to go towards this purchase. Contributions made by an employer do not count, the money has to come from an individual’s own voluntary deposits into their fund.
First home buyers grant
Don’t forget about the first home buyers grant. This scheme saw no update in the latest budget but is there for those first homeowners looking to purchase a property worth $600,000 or less.
Under this scheme a one-off grant of $10,000 for those buying or building their first homes. You can learn more and find out if you’re eligible here.
These are all the latest schemes for first home buyers announced in the 2021 Federal Budget. Note that the schemes, eligibility requirements and allowances differ between states, so check your state government webpage for more information.
The newly introduced Home Builder Scheme, which provides money towards renovations, was also extended by a further 12 months for those looking to spruce up their homes.
It’s tough out there in the housing market but here’s hoping one or all of these schemes help you to afford both a new home and some avocado toast.
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