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What does the Budget 2022 mean for first-home buyers?

Metricon

While a reduction in petrol prices, tax cuts and other hip-pocket savings were welcome news in this year’s budget, what will really get first home buyers excited is the Government’s announcement of an expanded New Home Guarantee.

With 50,000 additional places added to this scheme, it will effectively more than double the number of spots available each year, giving thousands of aspiring homeowners the opportunity to purchase a new home without having to save a full 20 per cent deposit or take out costly lenders mortgage insurance.

Here are the key points you need to know about the expanded New Home Guarantee and the newly established Regional Home Guarantee:

  • The Government is expanding the Home Guarantee Scheme to 50,000 places per year over three years.
  • Under the expanded scheme, 35,000 places will go to first-home buyers looking to purchase a new or existing home (up from 20,000 places this financial year).
  • Single parents looking to enter or re-enter the property market will be able to buy with a deposit of just two per cent (via the Family Home Guarantee), which has been expanded from 10,000 places over four years to 5000 places each year.
  • Eligible first-home buyers and regional Australians will be able to buy with as little as a 5 per cent deposit.
  • The Government will provide a guarantee for up to 15 per cent of the purchase price, waiving the need for lenders mortgage insurance.

A new guarantee to boost regional development

A new scheme will also be established called the Regional Home Guarantee that aims to encourage more construction outside of capital cities. This scheme will come into effect on October 1 with 10,000 places available per year and will be available to first-home buyers, people who have not owned a property in the past five years and permanent residents. Applicants must either build or purchase a newly built home.

Nuts and bolts you need to know

Both the New Home and Regional Home Guarantees are only available to people who are buying a home that is for sale under the thresholds listed below and a person is eligible if they earn no more than $125,000 a year and $200,000 for couples.

To find out more about how these updates can benefit you as a first-home buyer, get in touch with one of our New Home Advisors here, or call 1300 METRICON. Learn more about the expanded New Home Guarantee here.