First home buyers at the frontline of Frydenberg’s charm offensive

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May 11 2021
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There are few surprises to be found in this year’s federal budget, with Australian property investors and first home buyers set to benefit from new and expanded measures.

Treasurer Josh Frydenberg’s latest federal budget is good news for established property players and first home buyers. Measures like negative gearing have been left untouched, while expanded and new schemes like the Family Home Guarantee promise to make the market easier for newcomers to enter.

Here’s a quick round-up of all the schemes, subsidies and tax cuts Australian property investors will want to know about in the 2021 federal budget.

Negative gearing and capital gains

While the 2021 budget includes a number of measures relevant to property investors, it doesn’t directly change existing arrangements around the mechanism of negative gearing nor capital gains tax.

This lack of action in regards to election sweeteners, such as negative gearing, was largely foreseen by property experts.

Right Property Group’s Viktor Kumar told nestegg sister publication SPI in April that “parties don’t mess around with property and tax pre-election. If they do, they get annihilated at the elections”.

Family Home Guarantee for Single Parents

The federal government is introducing a new measure to try and make housing a more affordable investment for single parents.

Aptly named the Family Home Guarantee for Single Parents, this scheme promises to assist up to 10,000 eligible applicants purchase a home with as little as a 2 per cent deposit over the next four years with the government guaranteeing the remainder.

The scheme has been met with approval by the banking sector.

According to Commonwealth Bank chief executive Matt Comyn, “This announcement will come as a welcome relief for hard-working single parents, particularly those working in essential services such as education, healthcare and public safety, looking to buy their first home or re-enter the property market.”

Applications for the Family Home Guarantee for Single Parents begin on 1 July 2021, with eligibility subject to a similar price cap system as the existing First Home Buyers scheme.

First Home Super Saver Scheme

Four years after its 2017 debut, the First Home Super Saver Scheme is now being updated to allow eligible first home buyers to withdraw up to $50,000 in voluntary super contributions early.

Previously capped at $30,000, the measure remains controversial.

Former prime minister Malcolm Turnbull claimed that the use of superannuation to purchase a property will simply enable further price increases.

New Home Guarantee

The FHLDS (New Homes) scheme (also known as the New Homes Guarantee) launched last year will be expanded for a second year, providing an additional 10,000 places in 2021-22.

First home buyers seeking to build a new home or purchase a newly built home will be able to do so with a deposit of as little as 5 per cent.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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