Boost to home ownership for those not already in the market

HOME buyers who do not currently own any land or property will see a boost to their coffers with the introduction of a Government run Help to Buy legislation.

The Help to Buy Scheme is proposed to be a shared equity system that will allow eligible home buyers to purchase a property with a smaller deposit.

Quite common in European countries, this scheme works by allowing buyers with a deposit of at least two per cent of the property’s purchase price to obtain a loan with an equity contribution from the Federal Government.

The size of the equity contribution available can vary from up to 30 per cent for an existing home to up to 40 per cent of the purchase price for a new home.

The program aims to assist eligible homeowners to enter the property market sooner with a smaller deposit and benefit from a smaller mortgage and smaller mortgage repayments.

While participants would not be required to pay rent on the portion of the home held by the Government, it is expected that the Government’s equity contribution be paid down over time or paid back if you sell.

A Housing Industry Association spokesperson has welcomed the new legislation and said it will support more young Australians access to housing and address the declining rates of home ownership.

HIA managing director Jocelyn Martin that the Help to Buy Scheme is an important initiative of the Federal Government to enable 40,000 eligible home buyers to obtain and secure a deposit for a new home faster.

“The Scheme intends on supporting eligible home buyers with an equity contribution from the Government,” she said.

“While the opportunity to own a home can be challenging, and the type of homes many families aspire to are changing shape, previous research conducted by HIA shows an overwhelming majority of Australians agree that home ownership matters.

“These and other forms of housing incentive programs are critical to boost housing supply and home ownership rates to support first home buyers raising the deposit more quickly and easily.

“We know from previous schemes, such as the first Home Buyer Grant, that grants such as Help to Buy, are effective to getting people into their own home, and new housing supply is stimulated by these schemes.”