Last night, the Morrison government handed down its federal budget for 2022-2023. Here is what you need to know if you’re looking to buy a property this coming year.
Treasurer Josh Frydenberg handed down the 2022-23 federal budget on Tuesday (29 March), revealing a $78 billion deficit (3.4 per cent of GDP). For the previous year, there had been a $79.8 billion deficit.
This year, home ownership is a major focus of the budget, as they expanded the home guarantee scheme.
Mr Frydenberg expressed: “Home ownership is fundamental to the Coalition.
“Home Builder, the First Home Super Saver Scheme and the Home Guarantee Scheme have helped make the dream of home ownership a reality.
Over the last year, 160,000 Australians purchased their first home.
Tonight we go further, more than doubling the Home Guarantee Scheme to 50,000 places per year.
Helping more single parents to buy a home with a deposit as low as 2 per cent.
Helping more first home buyers to buy a home with a deposit as low as 5 per cent.
In this Budget we are also increasing our support for affordable housing by $2 billion through the National Housing Finance and Investment Corporation.
Helping more Australians to own a home is part of our plan for a stronger future.”
Changes to the Home Guarantee Scheme explained
The government has extended its Home Guarantee Scheme, increasing the number of places available under the First Home Guarantee and Family Home Guarantee programs. They also launched a new scheme solely for regional Australia.
The Home Guarantee Scheme will now include up to 50,000 places a year over the coming four years from 2022-2023, which is more than double its current capacity.
For First Home Buyers
The First Home Guarantee (previously the First Home Loan Deposit Scheme) will increase to 35,000 places available per year, which is a healthy increase from the current 10,000.
The First Home Deposit Scheme initially started in 2020 to enable first home buyers to buy a property with as little as a 5 per cent deposit without lender’s mortgage insurance (LMI) as the government would guarantee up to 15% of the property purchase price.
For Single Parents
The Family Home Guarantee gives single parents with dependent children the opportunity to purchase a property with a minimum 5 per cent deposit. This guarantee is now extended from 1 July to 30 June 2025, with 5,000 places available a year.
Regional Home Buyers
Regional residents also received a mention, launching a new guarantee scheme specifically geared towards regional buyers.
The Regional Home Guarantee gives borrowers in regional areas (including those who aren’t first home buyers) the ability to buy or build a new home with a minimum 5 per cent deposit, while the government guarantees 15 per cent of the property purchase price. This gives regional buyers the ability to avoid LMI.
This scheme is only available for residents who have not owned a home in the last five years. This scheme is yet to be fully finalised as it is subject to legislation being passed, it is anticipated to launch in the 2022-23 year.
“You’re seeing that in property prices for example in the regions. People want a land and house package, they want that peace of mind and don’t want to be locked down in the cities,” said Mr Frydenberg .
Community Housing Support
The National Housing Finance and Investment Corporation (NHFIC), who administers the home guarantee scheme, saw an increase in its liability cap for low-cost loans supplied to community housing providers, to a total of $5 billion.
This rise in their lending capacity is expected to support around 10,000 more dwellings. It was also reported that the NHFIC has funded around 15,000 new and existing affordable dwellings since it was established in 2018.
If you would like to discuss your suitability for any of the above grants, reach out to us today.