In an attempt to help first home buyers and boost the housing supply, the government has announced they will introduce two non-tax related measures.
This is in addition to the extension of the bright-line test and the proposal to remove interest deductibility for residential rentals:
If you’re a first-home buyer, from 1 April the income caps for the First Home Loan and the house price caps under the First Home Grants scheme will increase.
For the First Home Loan scheme, borrowers can get a home loan with just a 5 percent deposit if they earn under $95,000 a year for one person, or under $150,000 for two or more people buying together. These loans are underwritten by Kāinga Ora and can be obtained with participating lenders (e.g. banks).
The First Home Grants scheme gives first-home buyers a lump-sum payment from the government, up to $5000 for existing properties, or up to $10,000 for new properties.
The measures they have introduced are:
- The annual income cap for first home buyers accessing government assistance is due to increase to $95,000 for singles (up from $85,000) and $150,000 for multiple buyers (up from $130,000).
- The house price cap is due to increase depending on the location of the property and whether it is a new build or existing property.