Commonwealth and state/territory support for home buyers takes a number of different forms; however, government support has long term public benefits when it focusses on increasing the number of dwellings in the community.
Federal Election 2022
As part of its 2022 Federal Election campaign, the Australian Labor Party (ALP) has promised the ‘Help to Buy’ shared equity scheme for 10,000 households each year (who don’t appear to have to be first home buyers but can’t currently own a property). The Federal Government will be able to contribute a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home. The ALP has also announced a Regional First Home Buyer Support Scheme to help 10,000 first home buyers a year in regional Australia to buy a home with a 5 per cent deposit.
Existing First home buyer programs
Commonwealth Government loan guarantee
The Commonwealth Government’s Home Guarantee Scheme, (announced in the 2022 Budget) supports eligible homebuyers to purchase a home with a low 5 per cent deposit, provides 50,000 guarantees per year for 3 years from 2022–23. The Scheme will then drop down to 35,000 guarantees a year after that.
The allocation will be:
- 35,000 guarantees per year ongoing for the First Home Guarantee (formerly the First Home Loan Deposit Scheme)
- 5,000 places per year to 30 June 2025 for the Family Home Guarantee (for eligible single parents with at least one dependent child in purchasing a family home)
- 10,000 places per year to 30 June 2025 for a new Regional Home Guarantee that supports eligible people to purchase a new home in a regional location.
Through the Scheme the Government is targeting people who haven’t been able save enough of a deposit to get a loan from a bank or other lender to buy a home. Using the Scheme, first home buyers can buy a home with a 5 per cent deposit rather than the 20 per cent deposit usually required by banks.
The Commonwealth Government, through the National Housing Finance and Investment Corporation (NHFIC), effectively guarantees to the lender up to 15 per cent of the home’s value. The intention is that first home buyers can purchase a home sooner as they need a much smaller loan deposit than would otherwise be the case, however the home buyers must be able to afford the ongoing loan repayments.
In a similar vein, the Family Home Guarantee is designed to help eligible single parents with children buy a home with a deposit of 2 per cent. Once again, the home buyer will have to show that they are able to repay the loan to their bank or other lender.
Commonwealth Government HomeBuilder grant
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant to build a new home, substantially renovate an existing home or buy an off the plan home/new home.
HomeBuilder provides a $15,000 grant for eligible contracts entered into on or after 1 January 2021 until 31 March 2021 (inclusive). (A $25,000 grant was available for eligible contracts entered into on or after 4 June 2020 up to and including 31 December 2020.)
First Home Owners Grant (FHOG)
Various states and territories across Australia have differing versions of first home owner grants.