Property price caps proposed for first home buyer scheme
Properties up to the value of $700,000 will be covered by the First Home Loan Deposit Scheme for new buyers in Australia’s most expensive regions, according to a new draft government mandate.
The government has released the draft investment mandate for the First Home Loan Deposit Scheme courtesy of the Treasury after the legislation backing the scheme passed through Parliament earlier this month.
The scheme provides a “guarantee” that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent, and will support up to 10,000 loans each financial year from 1 January 2020 on principal and interest-based loans.
As the draft currently stands, NSW’s capital and regional centres will have a price threshold of up to $700,000, which is the highest cap Australia-wide.
The rest of the state will be subject to a $450,000 cap.
Victoria’s Melbourne and regional centre cap for first home buyers is currently set at $600,000 and drops to $375,000 for the rest of the state.
In Queensland, Brisbane, the Sunshine Coast and the Gold Coast will be subject to a $475,000 cap, while the rest of the state is subsidised to $300,000.
Adelaide is likely to be capped at $400,000, on par with Perth and Hobart, but rest of state figures do differ, with Western Australia and Tasmania’s rest of state cap sitting at $300,000, while South Australia’s will be just $250,000.
Property prices able to be claimed for the scheme in ACT will be capped at $500,000, while the entirety of the Northern Territory’s first home buyers will be covered for houses priced up to $375,000.
The application of capital city price caps for large regional centres with populations in excess of 250,000 is in recognition of the fact that “dwellings in large regional centres tend to be significantly more expensive than other regional areas”, Treasurer Josh Frydenberg said.
He also reiterated that applicants will be subject to eligibility criteria, including having taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples.
More from this writer:
-
Gen Z and Millennials set to strike property market within 5 years
-
‘Cyber criminals have their sights set on property transactions’ as alarm raised for investors
-
5 Wollongong, Central Coast and Sydney suburbs earmarked for development
-
What are Australia’s best regions for rental yield?
-
Is there already a canary in the coal mine for Australia’s 1.2m homes target?
-
Geelong and Bendigo shine in ‘balanced’ Victorian market
-
Will a university education help you buy a house?