12 August 2021

Purchasing residential property in NSW – federal incentives from 1 July 2021

Are you a first home buyer? Are you a single parent? Are you aware that there are currently a number of federal government incentives which would assist you with purchasing your home?

See below a handy summary of such incentives:

 

First Home Loan Deposit Scheme

 

New Home Guarantee

 

What is offered?

You can purchase a home with a deposit of 5% of the purchase price (rather than 10%).

National Housing Finance and Investment Corporation will guarantee to a participating lender up to 15% of the value of the property purchased that is financed by an eligible loan.

The guarantee is not a cash payment or a deposit.

The property must be residential, which includes an existing house, townhouse or apartment, a house and land package, land and a separate contract to build a home, an off-the-plan apartment or townhouse.

Property must not exceed the relevant price cap for the area in which it is located. For NSW capital city and regional centres, the cap is $800,000.00.

10,000 places will be available from 1 July 2021 to 30 June 2022.

 

If you wish to build or purchase a new home, you can apply for a loan to purchase an eligible property through a participating lender, up until 30 June 2022.

The guarantee is not a cash payment or a deposit for your home loan.

The property must be residential, which includes newly-constructed dwellings, off-the-plan dwellings, house and land packages, land and a separate contract to build a new home and a substantially renovated property.

There are different contractual timeframes depending on whether you are purchasing or building the new home.

 

How do you apply?

Through a participating lender. The list of lenders is available here - www.nhfic.gov.au

 

Who is eligible?

They must be Australian citizens over 18 years of age. Permanent residents are not eligible. There are salary caps for single and couple applicants. There are relationship requirements for couples.

There are repayment obligations on the loans.

The property cannot be an investment property.

Applicants must be first home buyers who have not previously owned, or had an interest in, a property in Australia, either separately or jointly with someone else (this includes residential strata and company title properties).

 

 

Family Home Guarantee

What is offered?

This scheme can be used to build a new home or purchase an existing home with a deposit of as little as 2% of the purchase price.

The applicants can apply for a loan to purchase an eligible property through a participating lender. The National Housing Finance and Investment Corporation guarantees to a participating lender up to 18% of the value of the property.

The property must be residential which includes an existing house, townhouse or apartment, a house and land package, land and separate contract to build a home and an off-the-plan apartment or townhouse.

Property must not exceed the relevant price cap for the area in which it is located. For NSW capital city and regional centres, the cap is $800,000.00.

From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years.

How do you apply?

Through a participating lender. The list of lenders is available here - www.nhfic.gov.au

Who is eligible?

Eligible single parents with dependents can use the scheme (regardless of whether they are purchasing their first property or they have owned a property before).

They must be Australian citizens over 18 years of age. Permanent residents are not eligible. There are salary caps for the single parent (and child support payments are not included in calculating the cap). You must demonstrate that you are the natural or adoptive parent of the child.

 

It is important to note that you can take advantage of multiple schemes at the same time and also in addition to the First Home Owner Grant and stamp duty concessions that may be offered by NSW Revenue.

If you are unsure of your eligibility or would like further advice, reach out to our property team who would be glad to assist.

Author: Irene Horan

Contributing partner: Melissa Potter