On the housing front, more money has been put behind getting people into their first homes, with a further 10,000 places to be released per year for the successful First Home Loan Deposit Scheme.
This week saw every accountant’s favourite night of television for the year – Budget Night! After a turbulent 12 months that has seen the country emerge far stronger than expected (while leaving a number of soft spots throughout the economy) the focus has definitely been on what the Government would put forward to get Australia back on its Pre-COVID trajectory as well as address those issues which were already underlying but have been brought to the fore.
An extension of tax cuts for another year means that a large number of eligible tax payers will see a benefit of up to $1080, though this looks like the end of it after the upcoming year. Businesses should continue to see further investment as JobMaker initiatives like asset write-offs on new equipment also see an extension – putting new tools, machinery and technology in more hands and offering a flow on effect to other sectors.
On the housing front, more money has been put behind getting people into their first homes, with a further 10,000 places to be released per year for the successful First Home Loan Deposit Scheme. With house prices rising and the deposit often the biggest hurdle for buyers, this has allowed first home buyers that have saved a minimum of 5% deposit to purchase their first home without the added cost of Lender’s Mortgage Insurance (LMI) that typically applies where a borrower has a deposit less than 20% of the property’s value. Otherwise costing thousands of dollars (or flat out acting as a barrier to purchase), this system has been a cost effective way for the Government to support home ownership without a significant cost to itself – so positive all round.
Beyond this scheme, there has also been the introduction of the Family Home Guarantee, a new program designed specifically to help single parents enter OR re-enter home ownership. Based on the same principles as the First Home Loan Deposit Scheme, this allows eligible applicants to purchase with as little as a 2% deposit, again avoiding costly LMI. Recipients must still be able to otherwise cover their borrowing costs and repayments so it isn’t a straight handout, but again helps a segment of the market that can already be disadvantaged to overcome the biggest challenge. Starting with 10,000 places over 4 years, it will be interesting to see whether this scheme sees the same level of success.
And while applications may be closed, we have seen further figures on the success of Homebuilder, with 120,000 applications processed and this money continuing to flow through the economy for the next 12 months.