The 2022 Federal Budget was handed down yesterday, with plenty of cash splashed about to address the rising cost of living. Would-be first home buyers will find some relief, too, with the expansion of low deposit schemes and a new regional housing scheme. Lastly, those in regional Australia may be pleased with new funding for improved internet, road upgrades and a series of schemes designed to improve education, skills, exports and supply chains.
Here’s what you need to know.
Cost of living payments and tax offsets
Most of us have felt the pinch recently, especially at the petrol pump. To help combat the rise in living costs, the low-and-middle-income tax offset will be boosted this year by $420. Depending on your income, you may receive a tax refund of up to $1,500 per individual.
Welfare recipients and seniors will also receive one-off payments of $250, which will land in bank accounts in April.
Petrol and diesel excise will be cut in half for six months, dropping from 44.2 cents/litre to 22.1 cents/litre. Hopefully, by the time it returns to normal petrol prices will have stabilised.
Housing affordability
It wouldn’t be a Federal Budget without a focus on housing affordability. This year, there are three main planks to the Budget’s approach.
Expansion of the First Home Buyers Deposit Scheme
First created in 2019, the First Home Buyers Scheme (FHBDS) is enjoying a massive expansion from 10,000 places to up to 35,000.
The FHBDS allows eligible first home buyers to build or buy a new home with a 5% deposit and no lenders’ mortgage insurance (LMI). Under the scheme, the government guarantees up to 15% of a home loan, so buyers only have to find 5%. This is aimed at reducing barriers for first home buyers, who often struggle to raise the full 20% required by the banks to avoid LMI.
To be eligible, you must be buying a residential property. These include:
- An existing house, townhouse or apartment
- House and land packages
- New builds on existing land
- Off-the-plan homes
The price of the property is capped and varies depending on location.
Expansion of the Family Home Guarantee
The government has also expanded the Family Home Guarantee Scheme, introduced in last year’s Budget. This lowers the required deposit even further for eligible buyers, allowing single parents to buy a home with a deposit of just 2%. As with the First Home Buyers Deposit Scheme, the government will guarantee the remaining 18% required by the bank.
The FHG offers 10,000 guarantees to single parents over the next four years, or 2,500 places per year. To be eligible, buyers must be:
- An Australian citizen
- 18 years or older
- Earning $125,000 or less
- With dependants in their care
A new Regional Housing Scheme
Regional Australia has experienced a huge influx of new home buyers in recent years. In many places, that has put pressure on existing housing stock and created a rental crisis. To help alleviate this problem, a new Regional Housing Scheme (RHS) is designed to encourage construction of new homes in regional areas.
The RHS creates 10,000 places per year, commencing 1 October 2022, for first home buyers or people who haven’t owned property in the last five years. As with the other two schemes, the RHS allows buyers to purchase with as little as 5% deposit and a government guarantee.
To access it, buyers have to build a new home, or buy a newly built home in a designated regional area.
Increased lending capacity for affordable housing
The Budget also increases the lending capacity of the National Housing Finance and Investment Corporation (NHFIC) by $2 billion. The NHFIC provides low-cost loans to community housing providers, and the increased cap is expected to help support around 10,000 affordable homes for vulnerable Australians.
Regional spending
There’s a lot of focus on regional areas in the 2022 Budget. If you’ve made the move to the country, or you’re thinking of a tree change, the following might be of interest.
Faster internet
Regional areas that currently rely on Sky Muster and satellite broadband will benefit from an influx of cash to access upgraded speeds of 100 megabits a second. This will make it easier for regional Australians to work from home.
Infrastructure spending
The government has budgeted $17.9 billion over the next 10 years on infrastructure. Of note are a bypass on the south coast near Ulladulla, an upgrade to thePacific Highway at Wyong, funding for regional roads in north-west Queensland and northern Tasmania, and money to seal the Outback Way running between WA, the NT and Queensland.
Regional Accelerator Program
$2 billion is budgeted for the new Regional Accelerator Program, which brings together a number of disparate schemes for greater efficiency. The Program seeks to improve education and skill levels in regional areas, as well as better export and supply chain arrangements.