Government announces new home ownership scheme

While the majority of detail on the new and updated schemes will be revealed on Tuesday evening (11 May), the Treasury has revealed that a new guarantee scheme will be launched, while some existing measures will be expanded and/or extended.

Family Home Guarantee

One of the new measures that will form part of the new budget is a measure to help single parents purchase property.

Starting on 1 July 2021, the new guarantee aims to support divorced or separated parents with dependent children by enabling them to purchase a home sooner with a deposit of as little as 2 per cent. The government will guarantee up to a maximum of 18 per cent of the property purchase price, allowing the applicant to get a loan without paying lender’s mortgage insurance.

Applicants must be Australian citizens, at least 18 years of age and have an annual taxable income of no more than $125,000.

The new Family Home Guarantee, which will act in a similar way to the existing government guarantee schemes, will provide 10,000 guarantees over four years to single parents with dependents. 

It is expected that the program will have property price caps (similar to the First Home Loan Deposit Scheme), but would not be limited to first home buyers.

New Homes Guarantee expansion

The FHLDS (New Homes) scheme (also known as the New Homes Guarantee) which was launched last year, will be expanded for a second year, providing an additional 10,000 places in 2021-22.

First home buyers seeking to build a new home or purchase a newly built home will be able to do so with a deposit of as little as 5 per cent.

This is in addition to the 10,000 spots under the First Home Loan Deposit Scheme.

First Home Super Saver Scheme

The government has said it will also increase the maximum amount of voluntary contributions that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.

$124.7 million for public and social housing

The government also said it would provide $124.7 million in funding to enable the states and territories to “bolster public housing stocks”, or to meet their social and community housing responsibilities under the 2011 Fair Work decision on Social and Community Services wages.

‘Government understands the importance of owning your own home’

In a joint release, Treasurer Josh Frydenberg, Assistant Treasurer Michael Sukkar, Minister for Families and Social Services Anne Ruston, and Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said the measures would “help more Australians own their home sooner”.

“The government understands the importance of owning your own home and the significant economic and social benefits home ownership provides.

“Supporting more Australians to own their own home is part of the government’s economic plan to secure Australia’s recovery,” they said.

The Treasury noted that other initiatives to help Australians buy homes, such as HomeBuilder (which closed for applications in April), had helped support more than 120,000 Australians, and contributed more than $30 billion in residential construction.

Further details of the schemes will be included in the upcoming budget, which will be released on Tuesday evening (11 May).

[Related: Loan commitments dip for first time in months]