The government just announced the 2021-22 federal budget, and there are some exciting incentives outlined for individuals. This year, the government is taking a more targeted approach to benefit a wide range of economic sectors, including property investment.
A few of the highlights of this announcement include new home guarantee programs and tweaks to existing incentives.
Read on to see four ways you could benefit from these policies, and what they could mean for your property investment journey!
#1: The New Family Home Guarantee Program
It’s never been easier for single parents to buy a home. With just a 2% deposit, 10,000 single parents with a household income of less than $125,000 can buy a home starting 1 July 2021. The government guarantees the remainder of the deposit.
The program helps single mothers and fathers overcome one of the biggest obstacles to owning a home: deposit rates.
#2: The Existing New Home Guarantee program
This program has been extended for another year, with 10,000 new places up for grabs. If you’re planning to buy your first home this year, this program is for you! With just a 5% deposit, you can build or buy a new home while the government guarantees the rest of the deposit.
It’s worth noting that existing properties are not eligible for this, so only new homes qualify for this program. That means that there are fewer opportunities to take advantage of this program for new first homeowners living in built-up areas.
#3: The Existing First Home Super Saver Scheme
Currently, those saving up for a deposit on their first home can contribute up to $15,000 a year to their superannuation fund to take full advantage of special tax treatment. The cap for how much they can save is currently $30,000 but will be raised to $50,000 starting 1 July 2022,
This program was put in place to improve homeownership opportunities.
If you take advantage, you’ll save big on taxes!
#4: Post-Tax Downsizer Contributions
When Australians aged 65 and over sell their family home, the government currently allows them to make a downsize contribution to super. Starting 1 July 2022, the updated policy will lower this age to 60. That means individuals aged 60 or older will be able to make an additional non-concessional contribution of up to $300,000 to super from the proceeds of selling their home, provided they have lived there for ten years. Existing contribution restrictions and caps do not apply to the downsize contribution.
This incentive encourages older Australians to sell their family homes to free up more properties for younger generations. For younger Australians, this means more homes on the market.
Bonus Benefit: Extension to the Homebuilder program
Tuesday’s budget extends the HomeBuilder program by $780m by allowing commencement of works within 18 months, up from the original six. This measure is welcomed by the industry as it allows for a more sustainable build timeline over the coming 12 to 18 months. The demand for trades and materials has reached a point where large amounts of builds are being delayed at various stages which will be alleviated somewhat under this extension.
Make the Most of Your Incentives
Depending on what benefits you qualify for, starting or continuing your property investment journey could come sooner than you expected! Don’t forget to take advantage of these new and updated programs to get one step closer to buying your dream home or investing in your next property.
