Announcement date
28 March 2022
Link to announcement
https://ministers.treasury.gov.au/ministers/michael-sukkar-2019/media-releases/2022-23-budget-backs-aspiring-homeowners
Problem being addressed
Various cohorts of Australians face barriers to home ownership due to high deposit requirements, despite their ability to meet mortgage serviceability requirements.
Proposal
The Home Guarantee Scheme ensures part of an eligible buyer’s home loan is guaranteed by the Government, allowing a buyer to purchase a home with a smaller deposit and without needing to pay lenders mortgage insurance.
Under the expanded Home Guarantee Scheme, the Government will make available:
- 35,000 guarantees each year from 1 July 2022, under the First Home Guarantee, to support eligible first homebuyers to purchase a new or existing home with a deposit of as low as five per cent
- 10,000 guarantees each year from 1 October 2022 to 30 June 2025, under the Regional Home Guarantee, to support eligible homebuyers, including non-first home buyers and permanent residents, to purchase or construct a new home in regional areas with a deposit of as little as five per cent, subject to passage of enabling legislation, and
- 5,000 guarantees each year from 1 July 2022 to 30 June 2025, to expand the Family Home Guarantee, to support eligible single parents with children to purchase a home with a deposit of as little as two per cent
Assessed RIS outcome
Good practice
Regulatory burden
The Department of the Treasury estimates that this measure will result in annual regulatory costs of $5.69 million, on average, over ten years.