Australians will soon be able to buy a home with their friend as major changes are made to help millions of residents enter the property market.
The federal government is expanding three major grant programs that were originally only available to married couples or people in common-law relationships.
From July 1, “two eligible persons” will be able to request the first home guarantee, the regional equivalent and the family home guarantee.
Friends, siblings or parents are among those who will now be able to team up to take advantage of the grants.
A lifeline has been thrown to millions of frustrated Australians at not being able to enter the property market with a major change that allows friends to buy a house together
Under all three schemes, the federal government acts as a guarantor for up to 15 percent of a loan for home buyers.
This allows residents to purchase property with a deposit as low as five percent.
The programs allow homebuyers to avoid paying lender mortgage insurance, or LMI, saving them thousands more.
Federal Housing Minister Julie Collins said the change would go a long way to helping people get their foot in the door of the real estate market.
“We know things change and we have friends, siblings, all kinds of people coming into property all over Australia and we have to move with the times,” she told Channel on Sunday. Nine’s Today.
Ms Collins said that from July 1, Australian singles and permanent residents would also be eligible to apply, instead of just citizens.
“We want to help more Australians get into a home, especially those renting long term [and] those struggling to overcome the 20% mortgage deposit threshold,” she said.
“With this program, they can access home ownership sooner and we will save them tens of thousands of dollars because they won’t need mortgage insurance from the lender because the government will guarantee the remaining 15% of the deposit.”
Currently, on an $800,000 property where a buyer has a 5% deposit, they could pay an LMI of up to $41,300, depending on the lender.
The family home guarantee will be extended to include sole legal guardians of children alongside Australian permanent residents, meaning aunts, uncles and grandparents would also become eligible.
It is currently only open to single parents with at least one dependent child.
Ms Collins said caps would be introduced because expanding the eligibility criteria would make housing even more unaffordable by driving up prices even further.
“We are targeting it, we are capping the number so that there are 50,000 places in the family home guarantee across the country in the [next] year, she said.
Ms Collins said ‘price caps’ would also be used.
“What we don’t want to do is impact prices, but obviously we want to help Australians get into home ownership earlier,” she said.
Ms Collins said more was being done on other issues contributing to the housing crisis, which affects not only home buyers but millions of renters as well.
She said the Albanian government wanted returns from the Future Fund, Australia’s sovereign wealth fund established in 2006, to be “invested in social and affordable housing”.
Federal Housing Minister Julie Collins said the change would go a long way in helping people get their foot in the door of the real estate market.
The change paves the way for purchase between friends, siblings or relatives to access the first home guarantee, the regional equivalent or the family home guarantee.
She urged the Greens and the opposition to support pushing this reform through the Senate.
The announcement of grant eligibility comes after state and territory housing ministers announced last week that they would meet to discuss reforms that ‘strengthen tenants’ rights’.
On Friday, Ms Collins announced that the government would allocate an additional $2 billion to the National Housing Finance and Investment Corporation for more social and affordable rental housing in next month’s budget.
“This budget increase will help get more Australians into affordable rental housing sooner,” she said.
“This is action that will have a real impact on people’s lives and will support our plans to build tens of thousands more social and affordable rental units across the country.”
The government will also offer incentives in next month’s budget aimed at increasing the supply of rental housing by changing the way investment is made in built-for-rental housing.
They include the increase in the depreciation rate from 2.5% to 4% per year for eligible new construction projects for rent whose construction begins after May 9, 2023.
The government will also reduce the withholding tax rate for payments of eligible funds from managed investment trusts to foreign residents on income from newly constructed residential properties to be built after July 1, 2024 from 30% to 15%.
Origin: | This article originally belongs to Dailymail.co.uk