Single parents will be able to purchase a property with just a TWO PER CENT deposit under a home-loan scheme to be unveiled in the Budget
- New initiative will make it easier for single parents to get on the property ladder
- Under the Family Home Guarantee only a two per cent deposit is required
- The details of the scheme are set to be announced at Tuesday’s Federal Budget
Single parents who’ve been priced out Australia’s soaring property market are set to be the big winners in Tuesday’s Federal Budget, with a new scheme allowing them to purchase a home with a two per cent deposit.
The Government will outline part of their plan on Saturday, which aims to boost home ownership rates and get more single mums on the property ladder, The Australian reported.
Under the new plan starting in July, a single parent can buy a $500,000 home with deposit of just $10,000. Normally, the property would require a 20 per cent, or $100,000 deposit.
Single parents who’ve been priced out Australia’s soaring property market are set to be the big winners in next Tuesday’s Federal Budget. Pictured: A house in Victoria
Under a new scheme, single parents will be able to purchase a home with just a two per cent deposit (stock image)
Treasurer Josh Frydenberg said the ‘pandemic budget’ was about consolidating Australia’s financial gains and securing the country’s economic recovery in the wake of the Covid crisis.
‘We can’t take for granted the strong recovery we have seen,’ he said.
‘The budget numbers will show a strong improvement this year. What’s driving the strong economic improvement is the labour force resilience and people coming into work even more so than iron ore revenues.’
The new housing initiative will be called the Family Home Guarantee and is based on the highly successful First Home Loan Deposit Scheme (FHLDS).
Brought in last year, prospective home owners who signed up for FHLDS only had to save for a five per cent deposit, with taxpayers underwriting or guaranteeing the remaining 15 per cent.
The popular initiative opened with 10,000 buyers and it’s expected the FHG will have the same cap to begin with.
However the Government has implied that if all goes well the scheme will be expanded.
The new housing initiative will be called the Family Home Guarantee and is based on the highly successful First Home Loan Deposit Scheme (stock image)
The government will outline part of their plan on Saturday, in a strategy to boost home ownership rates and get more single mums on the property ladder (stock image)
It is expected that 125,000 single parents with dependent children will be eligible for FHG, with 80 per cent made up of women.
‘This budget is about more homes for more people to support families and increase their quality of life,’ Mr Frydenberg said.
Pictured: Treasurer Josh Frydenberg
To qualify for the FHG a single parent with a child under 21 can earn up to $125,000 a year, excluding child support payments.
There also may be some restriction on particular locations with high-risk foreclosure rates.
The price of a home eligible under the scheme will be capped at $700,000 in Sydney and $450,000 in regional areas.
The Government is also expected to announce another measure to supercharge the real estate sector, allowing prospective homebuyers to withdraw more money from their superannuation to buy a home.
At the moments house-hunters can withdraw $30,000 under the First Home Super Saver Scheme but that figure will be increased to $50,000.
The Treasurer will also add a further 10,000 places to the FHLDS – to be called the New Home Guarantee – which will be restricted to new buildings.