Budget initiatives to help aspiring homeowners

Government Initiatives to Support Property Ownership

In May, the Federal Government unveiled the 2024-25 budget, introducing measures aimed at alleviating cost-of-living pressures for Australians. These initiatives, coupled with the upcoming stage 3 tax cuts starting July 1, are set to increase net income and borrowing capacity for aspiring homeowners. Here’s a closer look at key initiatives designed to help you climb the property ladder sooner:

Help to Buy Scheme Funding

The government allocated $5.5 billion to its Help to Buy Scheme for 2024-25, targeting low and moderate-income homebuyers. Under this scheme:

  • The government contributes up to 40% of the purchase price for new homes and 30% for existing homes.
  • Eligibility criteria include being an Australian citizen aged 18 or older, earning $90,000 or less as a single or $120,000 or less as a couple, and not owning any other property.
  • Homebuyers must have saved a 2% deposit and be able to finance the remainder through a participating lender.

Housing Australia Boost

The government increased Housing Australia’s funding by $3 billion and its liability cap by $2.5 billion. This supports initiatives like the First Home Guarantee (FHBG):

  • Homebuyers can secure a home with as little as a 5% deposit without paying Lenders Mortgage Insurance.
  • Eligibility includes being an Australian citizen or permanent resident, earning up to $125,000 individually or $200,000 jointly, and intending to live in the purchased property.

Homes for Australia Plan Investment

A $6.2 billion investment over five years aims to build 1.2 million new homes from mid-2024:

  • $1 billion supports state and territory infrastructure for new homes, including roads, sewers, and energy infrastructure.
  • $1.9 billion in concessional finance aids community housing providers to deliver 40,000 social and affordable homes.

These initiatives are part of broader efforts to stimulate housing supply and affordability across Australia. For more details on eligibility and price caps, visit the official resources provided by Housing Australia.

Explore your options today and seize the opportunity to own your dream home.

Tax cuts

From July 1, the government’s stage 3 tax cuts come into effect, as follows:

Thresholds in 2023-24 ($) Rates in 2023-24 New thresholds in 2024-25 ($) New rates in 2024-25
0 – 18,200 Tax free 0 – 18,200 Tax free
18,201 – 45,000 19% 18,201 – 45,000 16%
45,001 – 120,000 32.5% 45,001 – 135,000 30%
120,001 – 180,000 37% 135,001 – 190,000 37%
>180,000 45% >190,000 45%

As a result of the tax cuts, some purchasers will see their borrowing capacity increase as their take home pay rises, meaning they will have more options when seeking finance for a home. For an idea of your borrowing capacity, get in touch and we’ll crunch the numbers.

Like to discuss your finance options?

If you’re planning a property purchase, let’s chat. We can run through whether you are eligible for any government incentives and explain your finance options.

Get in touch today.