Overall, the budget has had a positive effect on the property market, via the extending the First Home Deposit Scheme, maintaining the Home Builders grant, providing tax cuts and easing the rules for obtaining credit.
The Budget released Tuesday reaffirmed an earlier government commitment to extend the existing First Home Loan Deposit scheme to support another 10,000 first-time buyers over 2020-21. The scheme allows first home buyers to purchase newly built homes with only a 5 per cent deposit, with the government guaranteeing up to 15 per cent of the loan. The Scheme’s price cap has been extended to $950,000 for Sydney, $850,000 for Melbourne, $650,000 for Brisbane, and $550,000 for other capital cities and regional centres across Australia. This will allow first home buyers to access new homes which in previous has been identified as a deterrent in comparison to established home prices. The measure will stimulate activity in housing construction and is estimated to generate an additional $800 million in economic activity. See link below.
The scheme complements the $25,000 cashback announced in June for first home buyers buying newly built homes, known as Home Builder. The cashback is only available for purchases made before December 31. See link below.
The Treasurer announced $12.5bn in personal income tax cuts over the next 12 months, which will provide around 11.6 million individuals with a tax cut in 2020-21. The relief will total up to $2745 a year for singles and up to $5490 for couples. The tax cuts will improve households’ loan serviceability and allow them to potentially draw more money for property purchases. See link below.
Changes to responsible lending laws: Reforms will make the credit application process easier for consumers and allow eligible borrowers to obtain credit faster, improve competition by making it easier for consumers to switch lenders and enhance access to credit..
CoreLogic head of research Tim Lawless said last week that additional government spending, tax cuts and stimulus aimed at creating jobs would likely increase activity in the housing market.
Links
First Home Loan Deposit Scheme
Author : Scott Walkom, Director
E) scott.walkom@walkom.com.au
Walkom Real Estate
8/10/20