In May, the Australian Federal Government unveiled its 2024-25 budget, introducing various initiatives such as a $300 rebate on energy bills and rent assistance aimed at alleviating cost-of-living pressures for Australians. Additionally, the implementation of stage 3 tax cuts from July 1 is expected to potentially increase the borrowing capacity and net income of some aspiring homeowners.

Let’s explore some government initiatives that could expedite your journey onto the property ladder.

Help to Buy Scheme funding

The government has allocated $5.5 billion in its 2024-25 budget towards the shared equity Help to Buy Scheme for aspiring homebuyers with low to moderate incomes. Under this scheme, the government will contribute up to 40% of the purchase price for new homes and 30% for existing homes.

To qualify, you must:

• Be at least 18 years old and an Australian citizen
• Earn $90,000 or less as a single applicant or $120,000 or less as a couple 
• Live in the property 
• Not own any other land or property in Australia or overseas 
• Have saved a minimum deposit of 2% and secure financing for the remainder through a participating lender
• Be capable of covering upfront and ongoing costs
• Purchase a property within the price cap for your region

Housing Australia boost

The government has increased its funding to Housing Australia by $3 billion and raised Housing Australia’s liability cap by $2.5 billion. Housing Australia administers the Home Guarantee Scheme, including the First Home Guarantee (FHBG). Under the FHBG (which the government has previously indicated will be available until 30 June 2025), part of an eligible home buyer’s home loan from a participating lender is guaranteed by Housing Australia.

This scheme allows eligible homebuyers to secure a home loan with as little as a 5% deposit without paying Lenders Mortgage Insurance.

To apply for the FHBG, applicants must:  

• Apply as an individual or two joint applicants  
• Be Australian citizens or permanent residents at the time they enter the loan
• Be at least 18 years of age
• Earn up to $125,000 individually or $200,000 jointly
• Intend to live in the purchased property 
• Be first home buyers or former homeowners who haven’t owned or had an interest in a real property in Australia (this includes owning land only) in the past ten years.

More information on eligibly and price caps is available here.

Housing Australia also administers the Regional First Home Buyer Guarantee (RFHBG) and Family Home Guarantee (FHG).

Homes for Australia Plan investment

The 2024-25 budget includes a $6.2 billion investment aimed at constructing more homes across Australia. The plan targets the construction of 1.2 million new homes over five years starting mid-2024.

A significant portion of this funding, including a $1 billion boost, will support states and territories in building necessary infrastructure such as roads, sewers, energy, water, and community facilities for new homes, including social housing.

Up to $1.9 billion in concessional finance will be provided to community housing providers and charities to facilitate the delivery of 40,000 social and affordable homes under the Housing Australia Future Fund and National Housing Accord.

Tax cuts

Starting July 1, the government’s stage 3 tax cuts came into effect as follows:

Due to the tax cuts, some buyers may experience an increase in their borrowing capacity as their net income rises. This could provide them with more flexibility when securing financing for a home. To get an estimate of your borrowing capacity, reach out to your 1^st Street Mortgage Broker, and we’ll analyse the numbers for you.

Like to discuss your finance options?

If you’re considering buying property, let’s chat. We can discuss your eligibility for government incentives and explain the various finance options available to you.

Contact your 1^st Street Mortgage Broker today to get started!