Budget initiatives to help aspiring homeowners
In the 2024-25 budget, the Australian Federal Government introduced measures to ease the cost-of-living pressures many Australians face. Among them were a $300 energy bill rebate, increased rent assistance, and a highly anticipated rollout of the stage 3 tax cuts from July 1. While the tax cuts may boost net income for some aspiring homeowners and, in turn, their borrowing power, other government initiatives are also geared towards helping Australians get closer to their dream of homeownership.
Here’s an overview of how these programs may help you get a leg up on the property ladder.
Help to Buy Scheme Funding
The government has allocated $5.5 billion towards its Help to Buy Scheme, aimed at supporting low- and moderate-income Australians. This shared equity program allows eligible buyers to receive a government contribution of up to 40% of the purchase price for new homes or 30% for existing homes. This can reduce both the loan amount and ongoing repayment pressures.
Eligibility Requirements:
To qualify for this scheme, you must:
- Be an Australian citizen, at least 18 years old.
- Earn up to $90,000 as a single applicant or up to $120,000 as a couple.
- Intend to live in the property.
- Not own any other land or property in Australia or abroad.
- Have saved at least 2% of the property value for a deposit and finance the remainder through a participating lender.
- Be able to cover the upfront and ongoing costs.
- Choose a property within the price cap set for your region.
This scheme could be particularly helpful if you’re struggling with high deposit requirements. The government’s contribution means you can enter the property market with a much smaller loan balance, making your dream home more affordable sooner.
Housing Australia boost
The government increased its line of credit to Housing Australia by $3 billion, and Housing Australia’s liability cap by $2.5 billion. Housing Australia administers the Home Guarantee Scheme, which encompasses 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.
Homebuyers can purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance.
Eligibility Requirements:
To apply for the FHBG, you’ll need to:
- Apply as an individual or joint applicant.
- Be an Australian citizen or permanent resident.
- Be at least 18 years old.
- Earn up to $125,000 as an individual or up to $200,000 as a joint applicant.
- Plan to live in the property.
- Be a first-time homebuyer or someone who hasn’t owned property in the past 10 years.
The Regional First Home Buyer Guarantee (RFHBG) and Family Home Guarantee (FHG) are also administered through Housing Australia, providing additional options for buyers outside urban areas and single parents aiming to purchase a family home.
Homes for Australia Plan Investment
In response to Australia’s housing supply challenges, the government committed $6.2 billion in new investment under the Homes for Australia Plan. This includes the goal of constructing 1.2 million new homes over five years starting mid-2024, aiming to ease housing affordability issues by increasing supply.
Key initiatives under this investment include:
- A $1 billion funding boost for states and territories to support essential infrastructure for new housing, such as roads, sewers, and utilities.
- Up to $1.9 billion in concessional finance for community housing providers and charities to aid the delivery of affordable and social housing through the Housing Australia Future Fund and National Housing Accord.
By addressing housing supply with large-scale construction projects, this investment aims to make housing more accessible and reduce pressure on the rental market.
Tax cuts
From July 1, the government’s stage 3 tax cuts come into effect, as follows:
| Thresholds in 2023-24 ($) | Rates in 2023-24 | New thresholds in 2024-25 ($) | New rates in 2024-25 |
| 0 – 18,200 | Tax free | 0 – 18,200 | Tax free |
| 18,201 – 45,000 | 19% | 18,201 – 45,000 | 16% |
| 45,001 – 120,000 | 32.5% | 45,001 – 135,000 | 30% |
| 120,001 – 180,000 | 37% | 135,001 – 190,000 | 37% |
| >180,000 | 45% | >190,000 | 45% |
As a result of the tax cuts, some purchasers will see their borrowing capacity increase as their take home pay rises, meaning they will have more options when seeking finance for a home. For an idea of your borrowing capacity, get in touch and we’ll crunch the numbers.
Exploring Your Finance Options
If you’re considering a property purchase, understanding how these government initiatives can support you is essential. Whether you’re looking to access shared equity programs, take advantage of loan guarantees, or increase your borrowing power with tax benefits, these measures may make your path to homeownership smoother.
Get in Touch Today
We’re here to help you navigate these options. Contact us to find out if you’re eligible for any of these incentives, and we’ll guide you through your finance options. Together, we can find the best approach to help you make your homeownership dreams a reality.
Disclaimer: This blog offers general information on mortgages and finance for informational purposes only. It is not a substitute for personalized advice from a qualified mortgage professional or financial advisor. Use your discretion and seek professional guidance based on your individual circumstances.
