The Australian Government has announced that it intends to expand the eligibility criteria of the Home Guarantee scheme.
The scheme was initially introduced to support the affordability of first home ownership by allowing a prospective homeowner to have a 5% deposit with the government guaranteeing the remaining 15% deposit usually required to obtain a Home Loan.
From 1 July 2023, friends, siblings, and other family members will be eligible for joint applications under the First Home Guarantee and the Regional First Home Buyer Guarantee and can pool their funds together for the minimum 5% deposit. Previously, this was restricted to people that were married or in a de‑facto relationship, or single applicants.
The Guarantee extends to people who are not ‘first’ home buyers but who have not owned a property in Australia in the last ten years (for example due to financial issues or relationship breakdowns)
The Family Home Guarantee eligibility criteria has also been expanded to include single legal guardians of children such as aunts, uncles and grandparents.
The number of allocated places has increased, and all three guarantees will become available to eligible borrowers who are Australian Permanent Residents, in addition to Australian citizens.
There are criteria that must be adhered to in accessing the benefits of the Guarantees including total taxable incomes, age, purchase price of the Home.
Pooling your funds with another person to enter the property market may cure one problem but has the potential to create other problems.
Careful consideration and professional advice is strongly recommended.