Changes to the First Home Guarantee System
In 2020, then Prime Minister, Scott Morrison, announced the introduction of the First Home Loan Deposit Scheme. The Scheme was designed to assist first home buyers break into the property market with as little as a 5% deposit of the value of a home. The Scheme also removed the requirement for buyers to take out Lenders Mortgage Insurance (LMI)
Changes to the Scheme
In 2023, the Australian government introduced new changes to the Scheme effective from 1 July. Some of the key changes to the scheme include:-
|
|
First Home Guarantee |
Regional First Home Buyer Guarantee |
Family Home Guarantee |
|
How many places are available in the Scheme for the 2023-24 Financial Year? |
35,000 |
10,000 |
5,000 |
|
Minimum deposit required |
5% |
5% |
Under this scheme, the federal government acts as a guarantor on up to 18% of the loan which means applicants can buy a home with as little as a 2% deposit of the value of the home. |
|
Prior Property Ownership |
First-home buyers or previous homeowners who haven’t owned a property in Australia in the past 10 years. Applicants for either of these schemes can be first home buyers (i.e. never owned property in Australia) or previous homeowners who haven’t owned a property in Australia in the previous ten years prior to the date they executed their home loan. According to the National Housing Finance and Investment Corporation website, Prior property ownership includes a freehold interest in real property in Australia (this includes owning land only), an interest in a lease of land in Australia with a term of 50 years or more, or a company title interest in land in Australia. |
The criteria for applicants of this scheme have been expanded beyond single natural or adoptive parents with dependents. The scheme will be open to eligible borrowers who are single legal guardians of children, such as aunts, uncles and grandparents. |
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Eligibility *other eligibility criteria may apply |
Applicants must:
|
Applicants must:
|
Applicants must:- be an Australian citizen or permanent resident; be a single parent or a single legal guardian of at lease one dependent.
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Purchase Location |
All of Australia |
Regional Areas only. For the purposes of this scheme, a Regional Area is defined by the Australian Bureau of Statistics as an Australian Statistical Geography Standard 2016 Statistical Area Level 4 (ASGS SA4 2016). These areas are based on population density and labour markets and vary in size reflecting these criteria. The greater capital city areas of each state and the Northern Territory; and the entire Australian Capital Territory are excluded from this scheme. |
All of Australia |
Property Price Caps
The various schemes also set out to put a ‘cap’ on the value of the property. You will need to check the property price cap in your area:
First Home Guarantee and Family Home Guarantee
|
State/Territory |
Capital City and Regional Centres* |
Rest of State |
|
NSW |
$900,000.00 |
$750,000.00 |
|
VIC |
$800,000.00 |
$650,000.00 |
|
QLD |
$700,000.00 |
$550,000.00 |
|
WA |
$600,000.00 |
$450,000.00 |
|
SA |
$600,000.00 |
$450,000.00 |
|
TAS |
$600,000.00 |
$450,000.00 |
|
ACT |
|
$750,000.00 |
|
NT Regional |
|
$600,000.00 |
|
Territory |
|
All areas |
|
Jervis Bay Territory & Norfolk Island |
|
$550,000.00 |
|
Christmas Island and Cocos (Kneeling) Islands |
|
$400,000.00 |
Regional First Home Buyer Guarantee
|
State/Territory |
Regional Centres* |
All other Regional Areas |
|
NSW |
$900,000.00 |
$750,000.00 |
|
VIC |
$800,000.00 |
$650,000.00 |
|
QLD |
$700,000.00 |
$550,000.00 |
|
WA |
|
$450,000.00 |
|
SA |
|
$450,000.00 |
|
TAS |
|
$450,000.00 |
|
Territory** |
|
Regional Area |
|
ACT |
|
Not Applicable |
|
NT Regional |
|
$600,000.00 |
|
Jervis Bay Territory & Norfolk Island |
|
$550,000.00 |
|
Christmas Island and Cocos (Kneeling) Islands |
|
$400,000.00 |
* Regional Centres include Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.
** The greater capital city areas of the States and the Northern Territory; and the entire Australian Capital Territory are excluded from the Regional First Home Buyer Guarantee.