Millions more Aussies to become eligible for home grants as govt expands criteria

Friends and family members looking to team up to buy their first home will be among millions more Australians eligible to tap into government housing cash under a major expansion of three grant schemes. SEE IF YOU QUALIFY

Friends and family members looking to team up to buy their first home will be among millions more Australians eligible to tap into government housing cash under a major expansion of three grant schemes.

The criteria for the first home guarantee, its regional equivalent and the family home guarantee will be significantly expanded from July 1 in a bid to get more people into homes.

Under the schemes the federal government acts as guarantor on up to 15 per cent of a loan for prospective home buyers, allowing them to buy a house with a deposit as low as 5 per cent and avoid paying lender’s mortgage insurance.

The changes include the definition of a “couple” as only married or de facto relationships to now becoming “any two eligible individuals” — opening up the scheme to sibling pairs, a parent and child, or two friends.

Housing Minister Julie Collins said households had changed and the federal government needed to move to “meet the times”. Picture: Gary Ramage

The family home guarantee is currently open to single parents with at least one dependent child but will be expanded to including single legal guardians of children alongside Australian permanent residents.

This means single legal guardians of children like aunts, uncles and grandparents would also become eligible beyond single birth or adoptive parents with dependants.

The scheme will also open to people who haven’t owned a home in ten years, which the government signalled would help those who had fallen out of homeownership often due to financial crisis or a relationship breakdown.

Australian permanent residents would also be eligible to apply, instead of just citizens.

Housing Minister Julie Collins said households had changed and the federal government needed to move to “meet the times”.

“We know friends and family members are already teaming up to secure their own place to call home,” she said.

“Our actions will allow them to access vital assistance, just as couples have been able to previously.

“These are sensible changes that will help ensure more families have a safe and secure place to call home.”

In total, 35,000 first homebuyer spots are available each year, with 10,000 more for the regional first homebuyer guarantee and 5000 for the family home guarantee.

The Prime Minister announced $2bn in additional funding to support longer term and lower cost loans for community housing providers. Picture: Nikki Davis-Jones

Data from the National Housing Finance and Investment Corporation (NHFIC) shows the First Home Guarantee and Family Home Guarantee schemes were 99 per cent and 58 per cent subscribed in the 2021/22 financial year, with the unused spots rolling over to the next year. Two thirds of the Regional First Home Buyer scheme, introduced at the end of 2022, had been taken up six months into the program according to the latest figures.

The announcement comes just as housing ministers are due to meet, where the decisions made by national cabinet to “strengthen renters’ rights” is set to be high on the agenda.

Prime Minister Anthony Albanese, after the meeting, announced $2bn in additional funding for the federal government’s housing finance arm to support longer term and lower cost loans for community housing providers to increase supply.

Build to rent investors, mainly large overseas trusts, are set to benefit from a reduction in the withholding tax rate from funds to foreign residents on income on newly constructed properties from mid-July 2024.

Originally published as Millions more Aussies to become eligible for home grants as govt expands criteria