The Federal Budget will give first home buyers a better chance to crack into the current property market.
It has been reported that it would take first home buyers an estimated eight years to save for a house deposit in Sydney, and in Melbourne it would be expected to take approximately six years and nine months to put enough money together to purchase your first property. The time it takes to save for a home is only expected to continue to increase with interest rates set to remain low and property prices expected to continue to grow.
In order to help first home buyers save for a deposit and enter the property market, in light of skyrocketing property prices and record low wage growth, the Federal Budget has boosted its investment to offer loan guarantees and broader scope for people to use their superannuation to save that deposit.
What support has been included in the Federal Budget 2021
Measures to help first home buyers get into the property market will include the ability to release $50,000 from special accounts within superannuation funds. This is a substantial increase to the previous maximum withdrawal available under the ‘First Home Super Saver Scheme’ which was $30,000. This increase has been made in recognition of the rise in housing prices since the ‘First Home Super Saver Scheme’ was introduced in the 2017-2018 Federal Budget.
In order to apply to release superannuation funds for the purpose of purchasing property as a first home buyer, you must meet certain criteria, including:
- You must be over 18 years old to request determination or a release of amounts under the scheme
- You must purchase property with the funds you withdraw
- You must have never owned property in Australia, including investment properties, vacant land, commercial property, or had a company title interest in land in Australia
- If you have previously owned property in Australia, but suffered a financial hardship that resulted in a loss of ownership of all property interests, you may still be eligible to apply for the First home super saver scheme by using the hardship application form available through your myGov account.
The new rules for the First Home Super Saver Scheme will give people the choice of gaining the tax benefits of their super funds for the money they save for their first homes and will not involve government payments. People will have to make a voluntary contribution to their funds, up to a cap of $15,000 a year, and will be able to withdraw a maximum of $50,000 under the new rules. However, the rules will not be changed to allow people to withdraw employer contributions made through the super guarantee levy.
More places added for ‘First Home Loan Deposit Scheme’
With the number of first-time buyers in the housing market at the highest level in more than a decade, Treasurer Josh Frydenberg announced he will add 10,000 more places to the First Home Loan Deposit Scheme to help more Australians buy their first homes with deposits of as little as 5 per cent.
The 10,000 First Home Loan Deposit Scheme places will be available to eligible first home buyers from 1 July 2021 to 30 June 2022.
For a property to be eligible to buy under the scheme, it must be a residential property and be one of the following:
- an existing house, townhouse, or apartment
- a house and land package
- land and a separate contract to build a home
- an off-the-plan apartment or townhouse
All application for the First Home Loan Deposit Scheme must be made directly with one of the Scheme’s Participating Lenders (or their authorised representatives such as a mortgage broker).
With owner-occupied mortgages dominating loan approvals, Mr Frydenberg said support for families and home ownership were key objectives in the Federal Budget. After more than 120,000 applications for grants of $25,000 for renovations and new construction were provided from the HomeBuilder Scheme, which came to an end on 31 March 2021 and formed part of the Government’s economic response to COVID-19, Mr Frydenberg said he wanted to introduce other ways to help homeowners.
Attwood Marshall Lawyers – helping first home buyers secure their dream home
Our Property Law and Conveyancing team are ready to help buyers and sellers ensure their property transaction proceeds quickly and smoothly.
We aim to take the stress out of buying and selling property so that you can move into your new home faster without the fuss.
We offer FREE pre-signing advice on all Queensland Contracts to be able to give you quality advice and peace of mind before you enter into any agreements. Our Robina Town Centre office is also open Thursday nights and Saturday mornings for your convenience.
Attwood Marshall Lawyers are a PEXA certified law firm. This allows us to deliver fast, efficient and secure property transactions digitally. We strive to ensure your settlement will proceed seamlessly and happen on-time.
To avoid risk or unnecessary delays, get the right legal advice by contacting our Property and Commercial Department Manager, Jess Kimpton, on direct line 07 5506 8214, mobile 0432 857 300 or email email@example.com
Looking to buy property? 5 things you should know before signing a QLD Residential Purchase Contract
All NSW Land Transactions to be electronic in 2021 – Another step forward for digital property dealings