In May, the Federal Government delivered the 2024-25 budget. It included several measures such as energy bill relief and rent assistance aimed at easing the cost-of-living pressures on Australians.
For aspiring homebuyers, there are a few important announcements to be aware of that may help you get into the market sooner rather than later. Let’s take a look.
Help to Buy Scheme funding
The government allocated $5.5 billion towards its shared equity Help to Buy Scheme in 2024-25 for aspiring homebuyers on low and moderate incomes.
Under the scheme, the government will provide an equity contribution of up to 40% of the purchase price for new homes and 30% of the price of existing homes.
To be eligible, you need to:
- Be an Australian citizen and at least 18 years of age
- Earn $90,000 or less as a single or $120,000 or less as a couple
- Live in the property
- Not own any other land or property in Australia or overseas
- Have saved a deposit of at least 2 per cent and be able to finance the remainder through a participating lender
- Be able to pay for the upfront and ongoing costs
- Be buying a property that falls under the price cap for your region.
Housing Australia boost
The government increased its line of credit to Housing Australia by $3 billion, and Housing Australia’s liability cap by $2.5 billion. Housing Australia administers the Home Guarantee Scheme, which encompasses the First Home Guarantee (FHBG).
Under the FHBG (which the government has previously indicated will be available until 30 June 2025), part of an eligible home buyer’s home loan from a participating lender is guaranteed by Housing Australia.
Homebuyers can purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI).
To apply for the FHBG, homebuyers must be:
- Applying as an individual or two joint applicants
- Australian citizens or permanent residents at the time they enter the loan
- At least 18 years of age
- Earning up to $125,000 for individuals or $200,000 for joint applicants
- Intending to live in the purchased property
- First home buyers or previous homeowners who haven’t owned or had an interest in real property in Australia (this includes owning land only) in the past ten years.
The Regional First Home Buyer Guarantee (RFHBG) and Family Home Guarantee (FHG) are also administered by Housing Australia.
Homes for Australia Plan investment
The 2024-25 Budget included $6.2 billion in new investment to build more homes across Australia. The plan is to build 1.2 million new homes over five years from mid-2024.
The government said among other initiatives, the money would go towards turbocharging construction, with a $1 billion boost for states and territories to build the roads, sewers, energy, water and community infrastructure needed for new homes, and additional social housing.
Up to $1.9 billion in concessional finance will go to community housing providers and charities to support delivery of the 40,000 social and affordable homes under the Housing Australia Future Fund and National Housing Accord.
Other things to note for the coming financial year
Every household will receive a $300 energy bill rebate in the 2024-25 year.
And that from July 1, the government’s tax cuts come into effect. If you’re a typical income earner, this may mean your borrowing power will increase.
Like to discuss your finance options?
If you’re planning a property purchase, let’s chat. We can run through whether you are eligible for any government incentives, your borrowing capacity and finance options.
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