Up to 40,000 low- and middle-income earners will get additional help to buy a home from next year, as the federal government launches its promised Help to Buy scheme.
The states and territories agreed to the shared equity scheme, which was one of the federal government’s 2022 election promises, at National Cabinet on Wednesday.
Under the Help to Buy scheme, the federal government will contribute up to 40% of the cost of a new home, and 30% for an existing home, to 10,000 eligible buyers per year.
Eligible single people must have an income of no more than $90,000, while couples must have a combined income of no more than $120,000.
There will also price caps placed on the properties the government will support, which vary by state and city.
Prime Minister Anthony Albanese says the government is opening the door of home ownership to tens of thousands of Australians.
“So often these Australians have done all the right things – worked hard, saved up, made sacrifices, but a deposit for a home is still out of reach,” he said.
Proptrack senior economist Paul Ryan says the Help to Buy scheme would be popular with first-home buyers who were struggling to save a deposit.
“The good thing about this policy is that it recognises that the big burden for first-home buyers is saving a deposit, so the homebuyers who are accepted can jump that hurdle much more easily,” Mr Ryan said.
He says the Help to Buy and home guarantee schemes are better policies than first-home buyer grants and stamp duty concessions, which can contribute to higher home prices.
“These policies are likely to get first-home buyers into their homes sooner,” he said.
The Help to Buy scheme is the latest federal government-supported program to help Australians buy a home.
According to the federal government, more than 50,000 Australians have already accessed the Home Guarantee Scheme, which includes the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee.
Under the Help to Buy scheme, the federal government will contribute up to 40% of the cost of a new home to eligible buyers. Picture: Getty
Mortgage Choice broker Rob Lees says the Help to Buy scheme will help people who are struggling to get into the market.
“It may not be the first choice for first-home buyers as it would be better if they took up the home guarantee scheme, where they own the property and get the benefit of the capital growth, whereas the government will get part of the capital growth benefit through the Help to Buy scheme,” he said.
“There are people who are struggling to save a 5% deposit, so it’s good to have the option but it’s not the primary option.
“Homebuyers aren’t going to get the full benefit of the capital growth but they will get the security of their own home and that’s a good thing.”
Housing Minister Julie Collins said the Help to Buy scheme is a critical element of the government’s housing agenda to help address Australia’s housing challenges.
It comes after the federal government unveiled a package of national homebuilding, renting and planning reforms with the states and territories at National Cabinet on Wednesday.
Federal, state and territory leaders agreed to build 1.2 million new homes over five years, an extra 200,000 homes on top of the 1 million home target set out in last year’s National Housing Accord.
To help the states and territories reach this new goal, the federal government promised $3.5 billion in new funding for the states and territories to incentivise additional homebuilding and support service provision.
National Cabinet promised to harmonise a range of renters’ rights nationally and agreed to a raft of planning changes to housing supply and affordability.
It comes after the federal government reintroduced its flagship $10 billion Housing Australia Future Fund (HAFF) into parliament earlier this month, which has been blocked by the Greens and the Coalition in the Senate.
The Help to Buy scheme is estimated to cost about $329 million over the forward estimates.
Before the Help to Buy scheme can start, the states will need to pass laws to operate the Help to Buy scheme in their jurisdictions.
source: rea.com.au
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