First home buyers will be able to enter the property market sooner after the Coalition Government passed new laws through the Parliament today to implement the First Home Loan Deposit Scheme (the Scheme), and the National Housing Finance and Investment Corporation's (NHFIC) new research function.
The Scheme is designed to facilitate earlier access to home ownership for first home buyers, by providing a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent. The Scheme will support 10,000 first home buyers each financial year.
The Government recognises that saving a deposit has become a more significant barrier to entering the housing market. It can take ten years for the average first home buyer to save a 20 per cent deposit.
Applicants will be subject to eligibility criteria, including having taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples. The Scheme will apply to owner-occupied loans on a principal and interest basis, and will be subject to regional price caps.
The legislation also establishes a new housing research function that will allow NHFIC to examine housing demand, supply and affordability in Australia, complementing existing housing-related research.
The Scheme complements other Government initiatives to reduce pressure on housing affordability in Australia and support local communities. This includes:
- The First Home Super Saver Scheme which helps Australians build a deposit for a first home inside their superannuation fund by making voluntary contributions.
- Investing $1 billion in local infrastructure to unlock new housing supply, in partnership with local councils through the National Housing Infrastructure Facility.
- Releasing suitable Commonwealth land, including defence land, for housing development.
These incentives have helped thousands of first home buyers enter the market. In the past year, more than 110,000 Australians bought their first home – the highest level since 2009.
The Morrison Government's plan to build a stronger economy will continue to help first home buyers own their first home sooner.