Solo parenting is hard – emotionally, logistically, and financially, and of course getting on the property ladder is no easy feat. Having a place to call home provides enormous comfort and security, so you can focus on building your ideal life.
To help solo parents purchase a home, the federal government has introduced the Family Home Guarantee.
In this year’s Budget, Housing Minister Michael Sukkar announced that eligible single parents can purchase a home with as little as 2% whilst the federal Government guaranteed the other 18% required to finalise a home purchase. It’s called the First Home Guarantee.
No LMI, saving $24,000 or more
A 20% deposit also means that purchasers avoid expensive Lenders Mortgage Insurance (LMI) that protects the bank if you default. LMI on a property of value of $600,000 with a 5% deposit could be around $24,000 so the savings and lower barriers to entry are significant.
The scheme will be limited to 10,000 places spread out across four years.
Figuring out what else you may be eligible for
Now, this isn’t the only housing scheme incentive available right now. In fact, you’d be forgiven for being confused about the number of options available to you as some incentives are state-based and some are Federal.
Federal Housing Incentives
The ‘First Home Guarantee’ mentioned above is a Federal government incentive.
So too, the Federal government announced the First Home Super Saver Scheme (FHSSS) back in 2017 that allows you to withdraw up to $50,000 per person from super. This was increased from $30,000 in the May budget this year. Check the details because both the treasury and ATO websites are out of date.
‘Home Builder’ was another federal scheme that has just closed in April 2021 to incentivise new home purchasers and also stimulate the economic.
Every state and territory has some sort of incentive or grant and they generally range from $10,000 to 20,000, with many combining the cash bonus with a stamp duty reduction or exemption – depending on the property value – saving thousands more.
For example, here in Queensland the state government offers $15,000 to buy or build a new home up to $750,000 plus stamp duty concessions for property values up to $550,000.
Combine incentives and win
Combining the federal schemes and state-based opportunities is a boon for purchasers who were previously considered high-risk or ineligible. But with interest rates so low, perhaps now is the time to do your homework and take the plunge.
This is a good time for first home buying couples and singles, many of whom are single women with families, to enter the property market.
A word of caution
Just remember, the property market is rising right now and interest rates are at record lows.
These stimulus packages are inflationary which means prices are rising but you are still taking on debt that necessitates risk. So, make sure you do your numbers and give yourself some breathing space.
Get in touch to understand your options.