The Labor government has announced its plans to expand the eligibility criteria for the Home Guarantee Scheme in a bid to help more people gain access to the different guarantee schemes. The First Home Guarantee, Regional First Home Buyer Guarantee, and Family Home Guarantee will all see their eligibility criteria broadened to tackle Australia's housing challenges.
The changes include;
incorporating permanent residents into the guarantee schemes
expanding eligibility criteria for joint applications
allowing more single guardians to use the Family Guarantee, and enabling those who have previously owned properties to join the scheme. These guarantees are currently only available to Australian citizens, but from 1 July 2023, eligible borrowers who are Australian permanent residents will also have access to them.
Permanent residents now able to access the guarantee schemes
This is a big change to the schemes as previously only Australian citizens could access the schemes, but now the government will allow permanent residents to also access these Australian government property buying schemes.
Interestingly, permanent residents aren’t actually allowed to vote in Australia at elections, so it’s an interesting strategy for the government to allow them to access these schemes which essentially drives up competition for Australian citizens.
According to the to the August 2021 data from the ABS there were 3,000,000 permanent migrants in Australia who had arrived since 2000, with 1,800,000 becoming Australian citizens. That means there are approximately 1,200,000 permanent residents who will now quality for the property government schemes. This figure doesn’t include the additional permanent migrants who have arrived between August 2021 and May 2023.
Scheme places each financial year
First Home Guarantee 35,000
Regional First Home Buyer Guarantee 10,000
Family Home Guarantee 5,000
Whilst there are only a total of 50,000 places on the schemes, we expect these changes will mean those places will be snapped up quickly in FY23 given the buyer base they are now open to.
Eligibility for joint applicants to extend to friends, siblings and other family members
Friends, siblings, and other family members will become eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee. Previously, only couples and single applicants were eligible. These schemes allow first home buyers to purchase a property with only 5% deposit without needing to pay Lenders Mortgage Insurance (LMI).
Family Home Guarantee eligibility to expand to legal guardians
The Family Home Guarantee eligibility criteria will expand to include eligible single legal guardians of children such as aunts, uncles, and grandparents. This really should have been common sense from the start as not all legal guardians are parents, so it’s good that this technicality has been changed.
Previous home owners allowed on the scheme
The scheme will also allow previous property owners to enter the scheme, provided they have not owned a property in Australia in the last 10 years. The change aims to support those who have "fallen out of home ownership," such as those who have experienced financial crises or relationship breakdowns.
Overall, the Albanese government hopes that these changes will meet the times and allow more Australians to access vital assistance to secure their own place to call home. These changes will build on last year's increase in the number of places available and the establishment of the Regional First Home Buyer Guarantee, with a total of 35,000 places available per year across the First Home Guarantee, 10,000 places per year under the Regional First Home Buyer Guarantee, and 5,000 places per year under the Family Home Guarantee.