This year’s Federal Budget has some bonuses for people who are interested in buying property. If a purchase is on your agenda this year, you might find some good news amongst the announcements.
First home buyers, in particular, look to come on top after this year’s budget. Here is an outline of what has changed:
The 2022 Federal Budget
Beating deposit woes
With interest rates low but house prices high, many first home buyers find the deposit the greatest challenge of buying a home.
With this in mind, the government has implemented two measures this year to help with deposit struggles:
The Home Guarantee Scheme: The Home Guarantee Scheme has been operating for several years. The scheme made it possible for first home buyers to buy a home with only a 5% deposit, with the government going guarantor on the remaining 15%.
The scheme was only open to the first 10,000 successful applicants in previous years. However, this year, the government has expanded the scheme to be available to 35,000 first home buyers. Eligible applicants will have to earn less than $125,000 as an individual or less than $200,000 as a household. There is also a cap on how expensive the property can be. The caps vary from state to state but expect to be looking for a property under $800,000 at least for the time being. Speak to your mortgage broker about how to apply.
The Super Saver Scheme: The Super Saver Scheme allows first home buyers to add money to their superannuation fund specifically for a home deposit. Saving money into your superannuation is beneficial because it comes under a tax concession, making it faster to save significant amounts. Until this year, the amount you could save through this scheme was limited to $30,000. With this budget, the federal government has raised that cap to $50,000. Again, your mortgage broker is a good port of call to help you work out a strategy that leverages the benefits of this initiative.
Regional Australia
The pandemic saw healthy growth in regional real estate but at the cost of pricing out many regional Australians. With this in mind, the government has introduced The Regional Home Guarantee. The government has also put measures in place to help regional Australians or those hoping to move to the regions to own their own home.
The Regional Home Guarantee will be open to 10,000 successful applicants. It will help homebuyers who haven’t owned their own home in the past five years to buy a newly built home in regional Australia.
Now’s the time to buy
Property prices have settled after huge jumps in 2021 and there is more stock expected to come onto the market over the coming months. This is good news for buyers, especially if you can take advantage of the benefits announced in the budget.
If you have the capacity to, it makes sense to act sooner rather than later. This is because interest rates are expected to rise by the end of the year. If this happens, your repayments will be higher. It makes sense to lock in a low rate while you can, in order to reduce the overall cost of your home loan.
Want to buy a home in 2022? Reach out to your local Professionals representative.
