Home Guarantee Scheme expanded as National Cabinet flags supply increases

Last year, the Albanese government announced the first iteration of the Home Guarantee Scheme, which offered 35,000 places to support first home buyers purchasing a home with as little as a 5 per cent deposit and 5,000 places to assist single parents with dependents to purchase a home with a deposit of as little as 2 per cent. 

From 1 July this year, elements of the scheme — including the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee — will be expanded, with friends, siblings, and other families set to become eligible joint applicants under both the First Home Guarantee scheme and Regional First Home Buyer scheme.

Moreover, the programs will be expanded to non-first home buyers who haven’t owned an Australian property in the last 10 years, with the government hoping this increased allotment of the scheme will support those who’ve fallen out of home ownership, whether through financial hardship or relationship breakdown.

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

“We know friends and family members are already teaming up to secure their own place to call home. Our actions will allow them access to vital assistance, just as couples have been able to previously,” she said.

Eligibility for the Family Home Guarantee scheme will also expand from single natural or adoptive parents with dependents to eligible borrowers who are single legal guardians of children, such as aunts, uncles, and grandparents.

All three schemes will also become available to eligible borrowers who are Australian Permanent Residents, not only Australian citizens.

In total, 35,000 places are available per year across the First Home Guarantee, 10,000 places per year to 30 June 2025 under the Regional First Home Buyer Guarantee, and 5,000 places per year to 30 June 2025 under the Family Home Guarantee.

News of the scheme’s expansion follows National Cabinet’s meeting in Brisbane on 28 April, 2023, where housing initiatives, particularly those focused on supply and renters’ rights, were placed under the spotlight.

Prime Minister Anthony Albanese explained the outcome of the meeting will see national housing ministers develop a proposal for National Cabinet outlining reforms to strengthen renters’ rights across the country.

He clarified that these reforms will not be uniform across the country given that “different states will have different circumstances.”

“There are a range of measures that will be considered by state and territory governments to strengthen the system of renters’ rights, there was agreement on that,” he explained. Adding to that, while there won’t be a uniform approach, collaboration between states and housing ministers in the coming months will exist.

Moreover, the Prime Minister revealed over the six months, that planning ministers will also develop a proposal for the National Cabinet outlining necessary reforms to increase housing supply and affordability, before doubling down on his party’s commitment to the delivery of the Housing Australia Future Fund, despite the initiative presently being held up by the Coalition and the Greens in the Senate.

“You can’t argue for more housing supply and more social and affordable housing if you are continuing to oppose the program,” he declared.

The federal government is also looking into expanding the capacity of the Affordability Housing Bond Aggregator by raising the liability cap by $2 billion.

“That’s the fund that provides money for investment by community housing to expand support for the sector to increase supply for affordable housing in the budget,” Mr Albanese detailed.

Additional incentives set to be offered by the government in its upcoming budget on 9 May 2023 include:

-   Increasing the depreciation rate from 2.5 per cent to 4 per cent for eligible new build-to-rent (BTR) projects where construction commences after 9 May 2023

-   Reduce the withholding tax rate for eligible fund payments from managed investment trusts to foreign residents on income from newly constructed residential BTR properties after 1 July 2024 from 30 per cent to 15 per cent, subject to further consultation on eligibility criteria.

The Housing Industry Association welcomed the National Cabinet’s agreements, and deputy managing director for industry and policy, Jocelyn Martin, stated the HIA has “always agreed more needs to be done at the federal, state, and local level of government to achieve a sustainable level of supply where both the cost of buying or renting a housing is in the grasp of the average Australian.”

Ms Martin believes the announcements “recognise the extent of the housing crisis is a shared challenge,” adding “the Housing Australia Future Fund will provide the crucial base for these reforms to occur.”

She implored the opposition and crossbench to “not delay in passing these bills.”

“HIA is ready to work closely with industry and with all levels of government to ensure that these reforms will come to fruition,” she said. Adding that “without changes such as these, the housing problem will only worsen.”

“Governments on all levels have a role to play and [National Cabinet’s] proposals are a good step forward to easing the problem,” she concluded.