The government has made it easier for more people to access the Home Guarantee Scheme in the new financial year. Eligibility criteria for all elements of the scheme, including the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee, will be expanded.
The main changes take effect from 1 July 2023 and include allowing permanent residents to participate in the scheme, broadening eligibility criteria for joint applications, allowing more single guardians to use the Family Guarantee, and allowing those who have previously owned properties to join the scheme. We provide a summary of these changes below.
Permanent residents to be eligible
Australian Permanent Residents who meet the criteria will be able to access all three guarantees – the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee. Currently, only Australian citizens are eligible for these guarantees.
Joint applicant eligibility expanded
The eligibility criteria for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee will be expanded. From July, friends, siblings, and other family members can apply together to secure a home. Previously, only couples (married or in a de facto relationship) or single applicants could apply for these guarantees.
The shared equity scheme allows eligible first home buyers with a minimum 5% deposit to enter the property market and avoid paying the usual lenders’ mortgage insurance that applies to those with less than a 20% deposit. Instead, the government guarantees the remainder of the missing deposit, up to 15%.
Single legal guardian expansion for Family Home Guarantee
The eligibility criteria for the Family Home Guarantee will be expanded to include eligible borrowers who are single legal guardians of children such as aunts, uncles, and grandparents. Previously, only single natural or adoptive parents with dependents were eligible.
The Family Home Guarantee currently supports eligible single parents with at least one dependent child to buy a home with as little as a 2% deposit and without paying Lenders’ Mortgage Insurance. The government guarantees a maximum amount of 18% of the property’s value (as assessed by the participating lender).
Previous homeowners to be given access
The final change in the Home Guarantee Scheme is to allow previous property owners to participate. Currently, the schemes are only available to first home buyers, but starting from the new financial year, former property owners can apply if they haven’t owned a property in Australia in the last ten years. The aim of this change is to support those who have lost their homes due to financial crises or relationship breakdowns.
We can help
If you’d like to take advantage of any of these schemes, or simply get a foot on the property ladder sooner, contact us for a tailored financial strategy to help you reach your goals.