The Federal Government recently handed down its 2021 Budget, and there was something in it for many property buyers here in Singleton.
Through four key initiatives aimed at downsizers, single parents and first home buyers, the government is helping people buy their next home. In the process, it’s hoping to stimulate activity in the housing market, with flow-on effects for the economy as a whole.
We take a look at each of those initiatives and how they might impact your property search.
1. Super savings to entice downsizing
Encouraging older Australians to downsize to a smaller home has been on the government’s to-do list for some time. After all, if more people downsize it could free up the housing supply for families, encourage the building of apartments, villas and townhouses, and allow older Australians to stay in their own home for longer, even as they age.
The government already had a scheme, which allowed Australians of retirement age (65) to contribute some of the proceeds of the sale of their home into their superannuation, thereby attracting favourable tax treatment.
Now the age limit has been lowered, so that anyone over the age of 60 can contribute $300,000 from the sale of their home directly into their super.
2. Extending the First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme (FHLDS) is one of the Federal Government’s key initiatives to help first-time buyers get on the property ladder.
Treasurer Josh Frydenberg used the budget to announce that another 10,000 places will open up under the scheme from July 2021.
But what is it? The FHLDS involves the Commonwealth government guaranteeing up to 15% of a first home buyer’s home loan, allowing them to buy with as little as a 5% deposit and removing the need to pay expensive lenders mortgage insurance (LMI).
To be eligible, first home buyers need to be over 18 years old and meet an income cap of $125,000 or under, or $200,000 for couples. A maximum property value applies and varies depending on location. This is $450,000 in most areas of regional NSW but rises to $700,000 for Newcastle. And your 5% deposit needs to be “genuine savings”.
With Singleton’s median house price $416,000 as of May 2021, that means eligible first home buyers could easily get their first foot on the property ladder with a 5% deposit of $20,800. They could also potentially combine the FHLDS with the NSW government’s stamp duty exemptions or concessions and First Home Owner Grant. This provides $10,000 towards purchasing any new home valued under $600,000. First home buyers can also use the scheme to buy land, where the combined value of land and dwelling is under $750,000.
3. More tax breaks to help first home buyers save through super
The First Home Super Saver Scheme (FHSSS) is another Commonwealth Government initiative that allows first home buyers to take advantage of the lower superannuation tax rate of 15% in order to boost their savings, by letting them withdraw savings contributions they make into the scheme.
Under the latest budget, the Commonwealth government has extended and enhanced the FHSS. From 1 July 2021, first home buyers will be able to withdraw up to $50,000 (the current cap is $30,000).
4. Helping single-parent families buy a home
The budget also saw a brand new program announced. The Family Home Guarantee launches in July and provides eligible single parents the opportunity to build a new home or purchase an existing home with just 2% deposit.
Under the scheme, the government will guarantee up to 18% of the cost of a single parent’s property, similar to the way the FHLDS operates.
All single parents with dependents will be eligible, including those who have owned property before, so long as they meet the income and property value caps. However, the government says that places in the scheme will be limited to 10,000 over four years. More details will soon be released soon.
What your money buys…
Here’s a sample of what you may be able to afford in Singleton if you qualify for these schemes:
16 Collett Avenue This classic, central Singleton 3 bedroom character home is on the market for $420,000.
40 Partridge Place Build your dream home on this 813sqm block of land with an asking price of $170,000.
46 Lachlan Avenue This 4 bedroom family home is perfect for first home buyers and is for sale for $450,000.
2/5 Gentle Close Perfect for downsizers or first home buyers, this 2-bed low maintenance duplex is beautifully presented and on the market with a price guide of $390,000 to $410,000.
If you’re interested in buying or selling in our local area, get in touch.