Bathurst Blog

The 2022 Federal Budget delivered some much-needed assistance to those looking to become involved in the real estate market, with the continuation of the Home Guarantee Scheme and the doubling of places offered by the scheme.

Additionally, the government has expanded the Family Home Guarantee, opening the scheme to 50,000 places annually, an increase from the previous cap of 20,000.

The Federal Budget has also introduced a Regional Home Guarantee (RHG).

Angus Raine, Executive Chairman, Raine & Horne, said:

 “I feel like it’s the 24th of December, and we’ve already opened our presents.

 “The expansion of the Home Guarantee Scheme from 20,000 to 50,000 places a year is a good step for first home buyers trying to jump off the rental treadmill.”

The extended First Home Guarantee will allow first home buyers to purchase a home with a 5% deposit without paying lenders mortgage insurance (LMI). Usually homebuyers with a deposit of less than 20% face additional hurdles to getting into the property market, including in many cases needing to pay for LMI, however under the scheme, the government will guarantee the loans with a 5% deposit.

Angus Raine went on to state that “Any budgetary measures that support first home buyers to manage the challenge of saving a significant deposit and realising their dream of homeownership sooner is welcome news.”

Regional Home Guarantee

The RHG scheme is designed to help Australians buy or build a new home in regional areas, with the government also hoping it will incentivise more migrants to settle in regional Australia.

Unlike other schemes, the RHG scheme is open to a wide variety of people that includes not only Australian citizens, but any permanent residents of Australia, meaning that immigrants have the opportunity to benefit from the scheme by settling in regional areas of the country.

 These citizens or residents will be eligible for the scheme if they are either first home buyers or have not owned a property within the last five years.

The scheme will open on October 1 this year, and in order to access it, applicants will need to either build or purchase a newly-built home in a regional area, such as Bathurst.

When discussing the introduction of the RHG scheme, Housing Industry Association (HIA) managing director Graham Wolfe, stated “many people have chosen to move to regional areas over the last two years to build a new life, placing pressure on housing affordability in these areas.”

“Supporting home building at the same time as supporting people re-entering the housing market can make a real difference,” he said.

Family Home Guarantee

Under the 2022-23 Federal Budget, the government has also extended the Family Home Guarantee, opening another 5,000 places for single parents with at least one dependent child who earn up to $125,000 per year. 

The Family Home Guarantee allows single parents to purchase their first properties or re-enter the housing market with just a 2% deposit.

Angus Raine has dubbed the extended support “commendable”, especially as it is becoming increasingly challenging to save the 10% deposit needed to achieve the dream of home ownership.

A tax break for older investors

In 2021, in a submission to the House of Representatives Standing Committee on Tax and Revenue, Mr Raine called on the Federal Government to consider capital gains tax breaks for older investors. 

 Angus noted increased real estate values during the pandemic has made it more challenging for older property investors – defined as baby boomers and the silent generation – to sell long-term assets.

“Property held by older investors contributes to supply challenges in capital cities. One option to breaking the supply impasse is to provide older investors with an exemption for, say, 24 months on the payment of the CGT liability.

“There are also other measures that could get empty nesters moving, such as stamp duty breaks when they downsize, which are the domain of the state and territory governments. 

“If we can provide encouragement for older property owners to sell their property assets, this will unlock a huge amount of stock and go some way towards addressing affordability now rather than waiting for builders and developers to fill the void.”

Housing affordability 

 It’s clear that the extended First Home Guarantee (previously called the First Home Loan Deposit Scheme), the extended Family Home Guarantee, and the new Regional Home Guarantee aim to address housing affordability nationally, Angus said. 

 He added, “While we support the new and extended initiatives to get more Australians into their own homes, there are still measures the next government can consider that will address affordability, including more support for older investors.”