There’s a major reform in the Home Guarantee Scheme (HGS), and Australians can now co-buy with family and friends, and even Permanent Residents (PR) can apply with a minimum deposit of 2%!
According to Channel Nine News Australia, the federal government has decided to expand the HGS to address housing issues. Starting from July, Australians participating in HGS can co-buy their first property with friends or relatives, and enjoy an ultra-low deposit. In addition, the definition of the term “couple” in HGS regulations will be expanded from married or de facto relationships to “any two eligible applicants”.
Federal Minister for Housing, Julie Collins, said that expanding the scope of HGS is to “keep up with the times”. “The Labor government is expanding HGS eligibility to help more Australians buy their first home.”
“This policy is a big help for those who have difficulty raising a 20% deposit. We need to accept the fact that more and more people are gaining property ownership through various means.”
Under HGS, the federal government will be the guarantor for the majority of the buyer’s loan. At the same time, buyers who participate in HGS can also be exempt from lender’s mortgage insurance (LMI).
Currently, HGS offers three different guarantees:
- First Home Guarantee: Eligible first home buyers can enjoy an ultra-low deposit of 5%.
- Family Home Guarantee: Supports single-parent families who meet certain criteria and can enjoy a low deposit of 2%.
- Regional Home Buyer Guarantee: Helps eligible remote area buyers enter the housing market.
Currently, the Family Home Guarantee is only available to single parents with at least one child. But under the new HGS rules, from July 1, guardians of children (such as grandparents, aunts, uncles or foster carers) are also eligible to apply for the Family Home Guarantee. Australian Permanent Residents (PR) are also included in the plan.