Are first home buyers the winners of the 2021 federal budget?
The recently unveiled Federal Budget is expected to support home ownership aspirations for thousands of households, according to Housing Industry Association (HIA) managing director, Graham Wolfe.
“This budget will make a difference in the lives of thousands of Australians,” he said.
A majority of the housing schemes are targeted to help first home buyers bridge the deposit gap and bring the aspiration of home ownership within reach of a broader range of Australians.
Under new measures, budding first home buyers will now be able to access up to $50,000 of their own concessional and non-concessional contributions that they can put towards a first home deposit.
This presents an expansion of $20,000 on the previous $30,000 limit that could be released under the First Home Super Saver Scheme, which has been welcomed by the property industry.
The changes “provide greater incentive and motivation for tens of thousands of young, aspirational Australians to save a deposit for their first home through a tax effective scheme”, said Wolfe.
CEO of Master Builders Australia, Denita Wawn, said: “Harnessing the power of compound interest in superannuation to save a deposit makes sense.”
The Government has also committed to an extra 10,000 places for the First Home Loan Deposit Scheme, helping first home buyers secure a property with a five per cent deposit.
A win for single parents
The Budget also expands on the success of the First Home Loan Deposit Scheme with the new Family Home Guarantee, which will assist single custodial parents buy a home with a deposit as low as 2 per cent.
“These measures build off the economy-saving success of the HomeBuilder scheme by providing more focused support where it is most needed,” Property Council chief executive Ken Morrison said.
This new scheme will deliver single parents, the overwhelming majority of whom are women, a step up to gaining the security that comes with home ownership.
“Matching the 10,000 places still to open under the Deposit Scheme from July with a new allocation of 10,000 places under the New Home Guarantee will help ensure first home buyers can choose to buy either a new home or an existing home”, Wolfe said.
Single custodial parents will need to wait until next week for a fact sheet with further information on eligibility criteria.
Other measures
Other measures revealed by Treasurer Josh Frydenberg also help support workers, downsizers and broader communities.
The budget has committed to lowering the minimum age for downsizer contribution from 65 to 60, allowing a one-off post-tax contribution of up to $300,000 per person when they sell their home.
The Federal Government has also announced additional funding under the National Housing and Homelessness Agreement.
“A further $124.7 million to assist states and territories to meet their social and community housing requirements will help meet growing demand for housing support”, said Morrison.
Master Builders also announced they were pleased to see the Federal Government stepping up to assist the states and territories with their role to provide community and social housing, following calls for boosted social housing investments.
Other measures also include an extension of the Boosting Apprentice Commencement wage subsidy which has helped restore confidence in job training to grow the next generation of homebuilders.
The government has also continued its 10-year, $110 billion spend on infrastructure, which includes $15.2 billion over the next ten years for new rail and road infrastructure projects, helping build communities.
“All up, this is a budget for all Australians. It is very welcome and is strongly supported”, Urban Taskforce chief executive Tom Forrest said.
