Taking a look at the ‘new’ First Home Loan Deposit Scheme - November 2019

This month we take a look at the Governments ‘new’ First Home Loan Deposit Scheme.

First Home Loan Deposit Scheme

Recently we’ve received a lot of questions regarding the ‘new’ First Home Loan Deposit Scheme. This Scheme has been designed to help first home buyers access the housing market sooner by lowering the deposit threshold required to enter the market.

Half of all young adults under the age of 30 are still living at home with their parents. It may come as no surprise that the majority of our enquiries are coming from interested parents curious to see if the Scheme applies to their children.

Although the legislation has been passed, the Government has stated that some details about the Scheme will need to be confirmed before it commences next year.

Here are some things that we do know about the Scheme:

• It will commence on 1 July 2020.

• The number of approvals will be capped at 10,000 per year.

• The National Housing Finance and Investment Commission will guarantee the difference between the deposit accumulated (a minimum of 5%) and 20% of the purchase price.

• Applicants must be first home buyers who are purchasing or building an owner-occupied dwelling and earn less than $125,000 pa (for individuals) or $200,000 pa (for couples combined).

• The loan cannot be interest only.

• Regional caps (to be determined after industry consultation) will apply to the purchase price to ensure participation is spread fairly across the country, and

• The scheme will complement other measures such as the Government’s First Home Super Saver Scheme and First Home Buyer grants, as well as State and Territory based stamp duty concessions.

• The application process has not yet been confirmed.

If you’re interested in discussing this further, please let us know.