The recent passing of the Help to Buy bill by the federal government is part of an effort to assist Australians in the pursuit of home ownership. This initiative allows participants to co-purchase a home with the government, with an equity contribution of up to 40% for new homes or 30% for existing homes. Additionally, participants are required to pay a mortgage for their share of the property while not needing to pay rent on the government's stake in the property.
To be eligible for the Help to Buy scheme, applicants must meet various criteria, including being an Australian citizen, over 18 years old, passing a financial capacity test, meeting income thresholds, not owning other property, and residing in the purchased house. The scheme aims to facilitate the purchase of 40,000 homes over four years, providing an opportunity for those who qualify to save on their monthly mortgage payments. While former housing minister Julie Collins highlighted the potential for savings and relief for participants, there is also a requirement to share capital gains with the government based on their equity share in the property.
The property price caps under the Help to Buy scheme vary depending on the location, with limits based on the median house prices in the respective areas. For instance, cities in Queensland have a cap of $700,000, while in New South Wales, it's set at $950,000. With a focus on ensuring fairness and transparency, the scheme includes provisions such as completing builds within a specified timeframe, annual recalculations by the government based on changing circumstances, and considerations for joint applications with income caps. Additionally, buyers will be subject to limitations on available placements, repayment deadlines to the government in case of arrangement termination, and governmental oversight regarding property purchase decisions.
In tandem with the Help to Buy program, the Build to Rent scheme is another government initiative that seeks to incentivize developers to build and maintain rental properties below market rates. This scheme aims to alleviate rental market pressures by facilitating the construction of additional rental homes, ultimately benefiting both developers and tenants.