The Family home guarantee scheme provides support to assist eligible single parents to purchase a home for their family regardless of whether they are a first home buyer or have previously owned a home and are looking to get back into the market.
Under the family home guarantee scheme, eligible single parents will need to have saved a 2% deposit and have access to sufficient additional funds to cover the costs associated with the purchase. For a first home buyer purchasing a property up to $650,000 there will be no stamp duty payable so the costs are likely to be between $3000 and $4000. Those that have owned a property in Australia previously, in addition to the 2% deposit, will need to have sufficient additional funds to cover stamp duty and the other associated costs of purchase – how much these costs are is dependant on the purchase price.
Who is an eligible single parent?
To be considered as an eligible single parent you must meet all of the following requirements:
- Be an Australian citizen over the age of 18 – the scheme is not open to permanent residents
- Be single: – do not have a de facto or legal spouse. Please note if you are separated but not yet divorced then you are deemed to have a spouse and not eligible for the scheme
- Have at least one dependant child – you must be the natural or adoptive parents and be legally responsible for the day-to-day care, welfare and development of the child and the child must be in your care. Please note that a child 16 to 22 can be considered a dependant child if they receive a disability support pension and live with you.
In addition to the above, you must have a taxable income of less than $125,000 based on your 2021 notice of assessment. This is the document issued by the tax office once you have lodged your tax return and typically tells you if you will receive a refund or if you owe the tax office money.
If you can meet all of the above criteria you may be eligible for a place in the scheme.
So what can you buy?
In NSW in locations considered metro (this includes Newcastle and Lake Macquarie local government areas) the maximum purchase price is $800,000 for regional location the maximum is $600,000. Use the postcode checker to check on the limits that apply to a property you might be considering.
Under the scheme, you can purchase both a brand new or an established property and there are no restrictions on type; so townhouses, units or apartments, and freestanding homes are all acceptable property types.
How to access the scheme?
Not all lenders have access to the scheme. Lenders had to apply and be accepted to be a provider. There are 25 small lenders and 2 of the majors which have access to the scheme. You can see the full list of scheme participates here
Other important information?
The scheme is for the purchase of a home so you must live in the property as your owner-occupied dwelling house whilst it remains in the scheme.
You will need to have completed your tax return for the financial year ended 30 June 2021 and be able to provide a copy of your Notice of Assessment.
Most lenders will require that you demonstrate genuine savings. This is usually established by regular savings from your income however it can be established by the use of your tenancy ledger with some lenders.
If you are a single parent and would like help calculating the deposit required or assistance to apply for a place in the scheme then please send me, Margaret Godfrey, Mortgage Broker Newcastle an email at email@example.com or give me a call on 0451 471 061 and I will be only too happy to help you navigate the process.