With housing affordability set to be a key election issue, the 2022 federal budget has expanded the First Home Loan Deposit Scheme which seeks to help first-time buyers get into the market.
The scheme is designed to assist those looking to buy a home with less than a 20% deposit usually required by mortgage lenders. Under the Scheme, the government guarantees up to 15% of a loan’s value, meaning buyers can secure a home loan with a 5% deposit.
In the 2021-2022 financial year the scheme was capped at 10,000 places. The 2022 budget is however expanding this as follows:
- 35,000 places to first home buyers looking to purchase a new or existing home (known as the First Home Loan Deposit Scheme).
- 10,000 places for first home buyers and previous homeowners in regional Australia (which will be known as the Regional Home Guarantee).
- 5,000 places per year for single parents looking to purchase their first home or re-enter the property market (which will be known as the Family Home Guarantee).
Applicants can either be first home buyers or previous home owners who do not currently own property.
Single applicants can have a taxable income of up to $125,000 per annum and couples can have a taxable income of up to $200,000 per annum. A couple must be married or in a de facto relationship and the applicants must intend to be owner occupiers.
In NSW, a price cap of $800,000 applies to capital city and regional centres (which includes Newcastle and Lake Macquarie) and a price cap of $600,000 applies elsewhere.
Liability limited by a scheme approved under Professional Standards Legislation