The federal government recently announced its 2021-2022 Budget, with a focus on continuing Australia’s economic recovery from the pandemic.
And there were positive inclusions for many potential property buyers and sellers.
The Budget announcement focused on the “economic and social benefits” of homeownership. In line with this, the government has expanded or introduced four different schemes to help three key groups: downsizers, single parents and first home buyers.
We believe that these changes could have an impact on the property market in our area and encourage many to make a move.
The demographic: We help a lot of downsizers navigate the property market in our area. Many are selling a larger family home in our area and attempting to find a smaller one here. Others are downsizers from the cities or other regions, looking to move to Lake Macquarie, Newcastle or Maitland for a lifestyle change.
The Budget announcement: The government is expanding the “downsizer contribution”, which was originally set up to reduce pressure on housing affordability under the 2017–18 Budget. The scheme allows Australians nearing retirement to make a post-tax contribution of up to $300,000 per person to their superannuation when they sell the family home. Over 22,000 people have already made use of this scheme, and that’s set to increase now the minimum age has been lowered from 65 to 60 as of 1 July 2021.
The demographic: It’s no easy thing to save up enough money to buy a property on one income and it becomes even harder when you’re responsible for kids. The government is pushing the long-term social and economic benefits of homeownership, and aiming to give single parents a helping hand to get onto – or back onto – the property ladder.
The Budget announcement: The government has used the Budget to establish a brand new scheme called the Family Home Guarantee, under which it will guarantee up to 18% of the cost of a single parent’s property. This means that eligible single parents may be able to get on the property ladder with as little as a two per cent deposit, without having to pay for the costs of lenders mortgage insurance (LMI). As of 1 July 2021, 10,000 places will be made available progressively, over the next four years.
To be eligible, you must be a single parent with dependents. You also need to meet the income cap of $125,000. You can buy a new or existing home. You can also be re-entering the property market or buying a home for the first time but you can’t own property at the time you’re buying. The property price threshold is capped at $700,000 for capital cities and regional centres (including Newcastle) and $450,000 for regional NSW.
First Home Buyers
The demographic: We help a lot of first home buyers take their first step onto the property ladder in Lake Macquarie, Newcastle and Maitland. Saving a deposit is often the most difficult part of the whole process, particularly in a rising market where the goalposts feel like they’re constantly shifting.
First home buyers are already often eligible for four schemes. The State Government runs The First Home Owner Grant and the First Home Buyer Assistance Scheme, which offers stamp duty exemptions or concessions. Meanwhile, the Federal Government runs the First Home Loan Deposit Scheme (FHLDS), and the First Home Super Saver Scheme (FHSSS).
The Budget announcement: The government used the latest Budget to expand both these federal schemes from 1 July 2021, which could help more first home buyers get on the property ladder sooner.
• The FHLDS involves the Commonwealth government guaranteeing up to 15% of a first home buyer’s home loan. This means you can buy with as little as a five per cent deposit, without the need to take out expensive lenders mortgage insurance (LMI). In its Budget announcement, the government says it will expand the scheme by adding 10,000 more places.
Income caps of $125,000 for individuals and $200,000 for couples apply and the property must be worth less than $700,000 ($950,000 if it’s brand new) if it’s in Newcastle or Lake Macquarie or $450,000 ($600,000 for new properties) in Maitland.
• The FHSSS allows first homeowners to make additional contributions to their super at a lower tax rate of 15%, which they can then withdraw and put towards a home deposit. Under this Budget, the current cap of $30,000 is being increased to $50,000 allowing first home buyers the opportunity to save more, and pay less tax on it.
Our area is perfect for first home buyers, single parents and downsizers
We have a range of properties available in Lake Macquarie, Maitland and Newcastle that appeal to families, first home buyers and downsizers. The good news is that many of our properties fall under the caps for the Family Guarantee or the FHLDS.
If you do qualify for the schemes here’s a taste of what you may be able to afford.
93 Gillies Street, Rutherford is a great two-bedroom home in a top location on an 800sqm parcel of land. It’s on the market for $429,000.
14 Marks Street, Belmont is a two-bedroom home on a corner block offering endless potential. It’s on the market for $430,000 to $470,000.
3/16a Jindalee Street, Toronto is a great renovated, freestanding villa offering easy, low maintenance living for $479,000.
12 Nita Street, Toronto is for sale for $499,000. It offers three bedrooms, is move-in ready and has elevated views including ocean glimpses.
5/172 Brunker Road, Adamstown is a great top floor unit with two bedrooms. This unit is in a very popular location and on the market with a price guide of $525,000.
6 Silverwater Road, Silverwater is on the market for $580,000 to $620,000. This is a fabulous three-bedroom cottage on a large level block in a tranquil location just a stone’s throw from the water.
If you’re interested in buying or selling in our local area, get in touch.