In the budget announcement on 11 May 2021, the Australian government has introduced new measures to assist Australians to afford the purchase of their property.
The new Family Home Guarantee acts similarly to the First Home Loan Deposit Scheme where the government acts as a guarantor to single parents to allow them to purchase a property with as low as a 2% deposit! Successful applicants are also exempt from lenders mortgage insurance which usually applies to borrowers with low deposits. Over the next four years, 10,000 guarantees will be made available for the single parents to apply.
Who is eligible?
From 1 July 2021, the Family Home Guarantee for will be available to single parents who meet the following criteria:
- Australian Citizen with child dependants;
- Annual income of less than $125,000.00;
- Owner-occupier of the purchased property; and
- Build a new home or purchase existing home.
However, applicants will also need to be aware of the following drawbacks:
- While being able to afford houses easier, only paying a 2% deposit on the property means that the applicants will be paying interests on a higher amount of mortgage.
- At the same time, applicants will need to prove that they will have the financial capabilities to afford the increased amount in order to be successful in their application.
The budget provides only a general outline of the grant, and the exact details of the guarantee may be subject to change when confirmed later on by the government.
Other announcements in the budget includes an increase in First Home Loan Deposit Scheme spots for purchases of new homes by 10,000 spots and maximum super voluntary contributions have been increased from 30000 to 50000.
We look forward to seeing the budget announced by the states to see if there are any further grants or incentive provided by the state governments.
If you have any queries regarding the above or about purchasing property in Australia, please do not hesitate to contact us at Vincent.firstname.lastname@example.org or 02 92674988 at any time.