The government has recently revealed details of the first home buyer grant that will make it possible for low and middle income earners to buy their homes sooner.
The grant, an election promise announced before the May federal election, will have 10,000 Australians each year benefit from it. The scheme will allow first home buyers to buy a property with only a 5 per cent deposit and the rest of the down payment guaranteed by the federal government.
The price threshold for support which is based on local median house prices is $700,000 for a house in Sydney and $600,000 in Melbourne. According to CoreLogic, the median value of Sydney property in September is $805,000 and Melbourne property is $635,000.
Here are the salient points of the first home buyer grant:
- The Federal Government will offer loan guarantees for eligible buyers on low and middle incomes
- The scheme is aimed at helping up to 10,000 first home buyers enter the market each year
- The scheme will allow first home buyers to deposit a per cent down payment on homes
- The government will guarantee loans up to caps of $700,000 in Sydney and $600,000 in Melbourne
- The scheme will start in January 2020.
- The government announced the scheme ahead of the Federal Election in May
First Home Buyer Grant Eligibility
- The grant is available to first home buyers who are single with an annual taxable income of up to $125,000 and couples with an annual taxable income of $200,000 and below.
- The first home buyer grant will apply to owner-occupied principal and interest loans.
Where to Avail the First Home Buyer Grant
There are no available details yet on what banks people can access the first home buyer grant from.
According to Housing Minister Michael Sukkar, only two of the big four banks will be chosen to be involved in the scheme, with 50 per cent of all guarantees reserved for smaller lenders.
Further Details to be Announced
Further details of the framework of the first home buyer grant to be announced at a later date. The government will be reviewing comments and criticism on the draft framework for the scheme until 4 November.
At the moment, price caps for each state differ, and other conditions are looked into like whether the property is located in a capital city, a large regional centre or area.
Minister Sukkar said there’s no set number of deposit guarantees per state and the government will monitor demands to shape the first home buyer grant further.
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