What’s in the 2021 federal budget for home buyers?

What’s in the 2021 federal budget for home buyers?

Property prices are rising sharply across the country, but those looking to buy a home are set to get some relief thanks to new measures that were outlined in the 2021-22 Federal Budget. 

Treasurer Josh Frydenberg noted in his speech to parliament that while the federal government’s HomeBuilder scheme from last year’s budget had been a huge success, “in this budget, our housing measures go even further”.

So, what are the new measures and how can they help you get your foot on the property ladder?

First Home Loan Deposit Scheme

The Federal Government is offering an extra 10,000 places in its First Home Loan Deposit Scheme.

Those who take up the scheme will only need a 5% deposit to purchase or build a home, with the government guaranteeing the remaining 15% that is usually required to avoid expensive lenders’ mortgage insurance. 

The scheme has been credited with helping first home buyers enter the property market sooner and has been hugely popular in the past, with places filling up soon after being released. 

Further information on the scheme can be found at www.nhfic.gov.au/what-we-do/fhlds.

Family Home Guarantee

Working in a similar fashion to the First Home Loan Deposit Scheme, the government is also now offering a Family Home Guarantee, aimed at helping single parents purchase a home.

The scheme will be available on both new and existing properties and will allow single parents with dependent children the ability to purchase a home with as little as a 2% deposit. 

Those using the scheme don’t need to be a first home buyer. Ten thousand places will be made available in the scheme over the next four years, with applications to open from July 1.

First Home Super Saver Scheme

The amount of voluntary super contributions that can be released under the First Home Super Saver Scheme has been increased from $30,000 to $50,000.

This scheme allows eligible first home owners to release their voluntary super contributions to use towards a house deposit. 

The changes will come into effect from July 1. 

Downsizer superannuation contribution

While not a scheme specifically for buyers, the downsizer superannuation contribution has been expanded in a bid to free up housing for young families hoping to enter the property market. 

The scheme, which allows downsizers the ability to boost their superannuation when they sell their home, has had the eligibility age drop from 65 to 60.

Those taking up the scheme can make a one-off, post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home, with both members of a couple able to contribute from the same home.