Federal budget 2021-22: Increasing home ownership
The major housing measures handed down in the recent Budget are outlined below:
Single parents will be given federal government assistance to purchase property
Under the ‘Family Home Guarantee’ policy, the government will guarantee 18% of a home loan for 10,000 eligible single parents over the next 4 years, whether they are first home buyers or previous owner-occupiers. This essentially enables property purchases with a 2% deposit, without the borrower paying lenders mortgage insurance (LMI).
The government will extend the first home loan deposit scheme (new homes) by 10,000 places
The initial round of the federal government First Home Loan Deposit Scheme, introduced at the start of 2020, was extremely popular with first home buyers. The majority of the initial 10,000 places were reserved within two months of its launch.
The additional 10,000 places introduced through 2020, which was just for new dwelling purchases, is being re-deployed and re-branded as the ‘New Home Guarantee’ in the Budget.
First home buyers can save more through their superannuation
The First Home Super Saver Scheme was announced in the 2017-18 Budget. The scheme allowed for voluntary contributions of up to $30,000 to be released for first home buyers, which could be used for the purchase of property owner-occupied property. The scheme works by accelerating savings through the tax benefits associated with superannuation. The 2021-22 Budget outlines an increase of these voluntary contributions of up to $50,000 to be released.
The government will expand the eligibility age for downsizer contributions by 5 years
The downsizer contribution was announced in the 2017-18 Budget. The measure allows older Australians to make a tax-free contribution to their super of up to $300,000 (each) from the proceeds of selling their home, without being counted toward the contribution cap. From July 2022, Australians 60 and older (as opposed to 65 and older) will be able to access the scheme.
A significant boost to infrastructure spending could also help to support housing demand in areas set to benefit from the capital investment. The budget outlines an additional $15.2 billion in infrastructure investment, bringing the total investment in infrastructure projects to $110 billion over the next decade. One of the big-ticket items include $2 billion for the Melbourne Intermodal Terminal.
Victorian Budget 2021/22: https://www.budget.vic.gov.au/
State Budget 2021-22 announcements: https://www.sro.vic.gov.au/state-budget-2021-22-announcements
Please contact The One Real Estate for any further information or for help in reaching your property goals.