October 27, 2022
Handing down Labor’s first budget since forming government, Treasurer Jim Chalmers presented a number of measures to help tackle housing supply and affordability. Like many, you may be unsure about how this budget affects you and your property goals. Let's check out some of the budget announcements and what they mean for you.
Two of the major issues we have with the property market right now in Australia are: affordability and supply. The newest budget aims to tackle both, with plans to either build new homes or free up existing property. There are also a number of schemes announced to support everyday Australians in buying their own home.
National Housing Accord
One of the big announcements of the 22/23 budget was the National Housing Accord. This Accord has been purpose-built to tackle the chronic under-supply of homes in the market by simply building more.
To boost supply, the National Housing Accord has the goal of delivering one million new, 'well-located' homes (close to train stations & TAFE campuses) over fives years from 2024.
To make the supply of new homes easier, the Accord will look at re-zoning and releasing new land for development, improving planning regulations and enabling easier financing of residential projects. With building set to start in 2024, it's a long term project that will take years to see fruit. But - we have to start somewhere.
Under the Accord, the Albanese Government has also committed to spending another $350 million over 5 years to deliver 10,000 affordable homes with an energy efficient rating of 7 stars or more. The states and territories have agreed to contribute funding or in-kind support to construct 10,000 more in that time frame.
Housing Australia Future Fund
Announced in the lead-up to the federal election, the creation of a $10 billion Housing Australia Future Fund will also provide a sustainable funding source to increase housing supply. The fund aims to provide 30,000 new social and affordable housing dwellings in the first five years of the fund being established.
Amongst the flurry of construction, a National Housing Supply and Affordability Council will also be established to support research and advice into housing supply and affordability.
The Downsizer Super Scheme
In an effort to free up valuable larger homes for young families, the Government has announced the Downsizer Super Scheme. The scheme includes a new enticement for older Australians to downsize their homes, by expanding the eligibility of people who can contribute to their superannuation fund from a sold home.
Previously, only those aged 60 or older were able to make a $300,000 one-off post-tax contribution to their super fund. Labor has lowered the minimum eligible age to 55 years.
Additionally, the government is extending the exemption of home sale proceeds from the pension asset test from 12 months to 24 months. The aim is to give pensioners more time to purchase, build or renovate a new home before their pension is affected.
Help to Buy
Another of Labor's election promises, the nationwide shared equity scheme - Help to Buy - aims to help buyers get into the property market with a smaller deposit. This idea isn't new: similiar shared equity schemes are already running in several states, including Victoria and Western Australia.
- Under the scheme, the Government will co-purchase 40% of the new property (or 30% of an existing home) with eligible buyers.
- Over time, the buyer can buy out the government or pay out their share once the property is sold.
- It will be open to 10,000 Australians each year.
- Individuals earning less than $90,000 and couples earining under $120,000 could be eligible.
- The scheme is expected to be up a nd running in the first half of 2023.
Home Guarantee Scheme
The budget announcement confirmed that the new Labor Government will continue to support places in the previous Government's First Home Guarantee Scheme. The scheme allows eligible first home buyers to purchase a property with just a 5% deposit, without paying Lenders Mortgage Insurance.
This can help eligible buyers get into their first home much sooner and put their money toward repaying their home and building equity. Price caps and eligibility requirements apply.
Regional First Home Buyer Guarantee
The budget also fast-tracked the Regional First Home Buyer Guarantee, which aims to help 10,000 buyers per year enter the housing market outside of capital cities.
Similar to the First Home Guarantee Scheme, eligible applicants can purchase a home with a deposit of as little as 5% with the government guaranteeing up to 15% of the purchase price.
We know it's a lot to take in
Federal budgets are rarely straight-forward, but the good news is: there are some great things to look forward to. And we're here to help! If you would like to buy a home in the future, but not sure where to start (or what grants & incentives are available to you), we can talk you through what schemes are available to you.
Call Mortgage Choice in Mornington on 03 5973 4011 or email sally.watson@mortgagechoice.com.au.
