The federal budget was handed down in May, and while it didn’t contain a huge amount for homeowners and buyers, there are some initiatives that will make a difference.
Here’s a look at how you may be able to use this year’s budget to your advantage if you’re trying to help your adult offspring get into their first home.
Changes to the Home Guarantee Scheme
If there is anything good to come from this year’s budget in terms of real estate, it is the expansion of the Home Guarantee Scheme.
The Home Guarantee Scheme essentially allows the government to go guarantor for first-home buyers, so they can put forward a five per cent deposit and not have to pay expensive lender’s mortgage insurance.
As it stands, eligible Aussies include married and de facto couples as well as individuals (plus some other criteria around income and the cost of the home being purchased).
However, as of the 1st of July, the scheme will be expanded to include friends and siblings who want to buy a home together.
In addition to this, buyers who have not owned a home for ten years may also be eligible for the First Home Guarantee after July 1st.
With the NSW Government’s stamp duty/land tax option being scrapped by the Minns Government, this scheme may be one of the few ways young buyers in Kellyville can get into the market.
You can visit the NHFIC website or consult your financial advisor to find out more.
How to leverage this to your advantage
If you are approaching retirement and have a family home, you may be thinking about downsizing. When you do this, you will hopefully have the funds to buy a smaller property and have plenty left over.
Thanks to the First Home Guarantee, if your adult children are eligible to apply, one option is to help them out with some money to use towards a deposit. This will help them get a foot on the property ladder without having to wait years to save a large deposit and without the risk of prices rising further while they wait. The changes to the First Home Guarantee mean that siblings could invest in one property together, which might make sense if you only have funds for one property.
Of course, you need to make sure that this is financially viable for you, so always make sure to talk to a financial adviser before you make any big decisions.
Other options to help your adult children buy a home
– Go guarantor yourself
If you have equity in your existing home, you may be able to go guarantor on a full loan so your children can buy with less of a deposit and avoid paying lender’s mortgage insurance.
– Refinance to help with a deposit
Again, if you have good equity and a good relationship with your children, you may be able to ‘donate’ some of their deposit so they can join the property ladder.
– Sell and buy a dual living property
Another option may be to sell your existing home and buy some land or a piece of property that either has a granny flat or has room to build. This way, you and your family could live on the same block and manage costs between you.
With wage growth in no way keeping up with rising housing costs, thinking outside the square can present solutions to give you and your family financial certainty in the future.
Get the help you need
Whether you’re looking into the Home Guarantee Scheme or hoping to help your kids to buy a place of their own in Kellyville, Notable Property can help.
We know the area better than anyone else and will be able to help you find the right buyer for your home if you’re thinking of downsizing or upsizing, or the right property if you’re hoping to move here.
Are you after real estate advice for Kellyville and surrounding suburbs? Contact Notable Property Group today.
