Australia’s Federal Treasurer Jim Chalmers delivered the Federal Budget on Tuesday, September 25. As part of the budget, Mr Chalmers outlined a five-point plan for cost of living relief:
- Cheaper child care
- Expanding Paid Parental Leave
- Cheaper medicines
- More affordable housing
- Getting wages moving again
Let’s take a look at the budget measures that relate to housing.
Federal Budget 2022 housing measures
Here are the Federal Budget measures that relate to housing
- National Housing Accord
- Housing Australia Future Fund
- Help to Buy Scheme
- Continuation of First Home Guarantee and Family Home Guarantee
- Regional First Home Buyer Guarantee
- Reduced downsizer age
- Defence Home Ownership Assistance Scheme
National Housing Accord
The National Housing Accord aims to build one million new homes over a five-year period starting in 2024.
The Accord will align the efforts of the government, institutional investors and the construction sector.
Housing Australia Future Fund
The $10 billion Housing Australia Future Fund aims to build 30,000 social and affordable homes over five years.
Of the 30,000 homes, 20,000 will be new social dwellings and 10,000 will be affordable homes for frontline workers.
Help to Buy Scheme
The Help to Buy Scheme is due to start in July 2023. The scheme helps people buy a home with as little as a 2% deposit.
If you’re eligible for the scheme and have a minimum 2% deposit, the Federal Government could contribute up to 30-40% of the purchase. The government’s contribution is called an ‘equity contribution’. The government’s equity contribution is up to 30% for an existing home and up to 40% for a new build. The scheme will save you money by reducing your mortgage and avoiding Lenders Mortgage Insurance.
There will be 10,000 places available each year. Eligibility criteria, income limits and property price caps apply. Also, you have to buy back the government’s share in your property over time.
It’s what’s known as a shared equity scheme. So, the government won’t charge you interest on its investment (you’ll still need to pay interest on your home loan though). But the government will share in any capital gains or losses proportionate to its share in the property. So, for example, if your home increases in value, the amount you’ll need to pay back to the government will increase.
Continuation of First Home Guarantee and Family Home Guarantee
The Labor Government will continue the Coalition Government’s First Home Guarantee and Family Home Guarantee schemes.
First Home Guarantee
The First Home Guarantee supports eligible first home buyers to buy a home sooner.
The scheme helps first home buyers buy a home with as little as a 5% deposit without paying Lenders Mortgage Insurance. Under the scheme, the National Housing Finance and Investment Corporation (NHFIC) will guarantee up to 15% of the value of the property. The NHFIC is administrating the scheme on behalf of the federal government.
The Guarantee isn’t a cash payment or a deposit for a home loan. The First Home Guarantee isn’t a shared equity scheme.
Eligibility criteria, income limits and property price caps apply. Also, there is only a selected group of home loan lenders who are participating in the Guarantee.
Family Home Guarantee
The Famly Home Guarantee supports eligible single parents with one dependent to buy a home sooner. The Family Home Guarantee is open to eligible single parents who are first home buyers or a previous homeowner.
The scheme helps eligible single parents buy a home with as little as 5% deposit without paying Lenders Mortgage Insurance. Under the scheme, the National Housing Finance and Investment Corporation (NHFIC) will guarantee up to 15% of the value of the property. The NHFIC is administrating the scheme on behalf of the federal government.
The Guarantee isn’t a cash payment or a deposit for a home loan. The Family Home Guarantee isn’t a shared equity scheme.
Eligibility criteria, income limits and property price caps apply. Also, there is only a selected group of home loan lenders who are participating in the Guarantee.
Regional First Home Buyer Guarantee
Labour’s new Regional First Home Buyer Guarantee will support 10,000 new homeowners each year until 30 June 2026.
The Regional First Home Buyer Guarantee aims to help eligible regional first home buyers to buy a home in a regional area with as little as a 5% deposit without paying Lenders Mortgage Insurance. Under the scheme, the National Housing Finance and Investment Corporation (NHFIC) will guarantee up to 15% of the value of the property. The NHFIC is administrating the scheme on behalf of the federal government.
The Guarantee isn’t a cash payment or a deposit for a home loan. The Regional First Home Buyer Guarantee isn’t a shared equity scheme.
Eligibility criteria, income limits and property price caps apply. Also, there is only a selected group of home loan lenders who are participating in the Guarantee.
Reduced downsizer age
The federal government is putting measures in place to encourage more older Australians to downsize their homes. This will hopefully free up housing stock for younger families.
The government is extending the exemption of home sale proceeds from the pension asset testing from 12 months to 24 months. This will give pensioners more time to purchase, build or renovate a new home before their pension is affected.
The government is also expanding access to downsizer superannuation contributions for people ages 55 to 59. The downsizer superannuation contribution allows people to make a one-off post tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. The contributions do not count towards non-concessional contribution caps.
Defence Homeownership Assistance Scheme
The Defence Home Ownership Assistance Scheme will help current and former Australian Defence Force members to buy their own home.
The scheme will support current and former Australian Defence Force members through monthly subsidies of monthly interest payments.
The government are reducing minimum service periods for subsidies mortgage interest payments and remover the current post separation timeframe to allow veterans to access the scheme any time after they leave the Australian Defence Force.
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