Home Loan Support in the 2025 Federal Budget
The 2025 Australian Federal Budget introduces several significant changes aimed at improving housing affordability and accessibility. These reforms are designed to assist first-home buyers, regional purchasers, and single parents in achieving homeownership. Below is an overview of the key updates and their implications for prospective home buyers.
Expansion of the Help to Buy Scheme
The government has allocated $800 million to expand the Help to Buy program, enhancing its accessibility by increasing property price and income caps. This initiative aims to support approximately 40,000 Australian households in entering the housing market. Under the scheme, the government provides an equity contribution of up to 40% for new homes and 30% for existing homes, enabling buyers to secure properties with lower deposits and reduced mortgage repayments.
Adjustments to the First Home Guarantee (FHBG)
The First Home Guarantee continues to assist eligible buyers in purchasing their first home with a deposit as low as 5%, without the need for Lenders Mortgage Insurance (LMI). For the 2024–25 financial year, 35,000 places are available under this scheme. Eligibility criteria include income thresholds of up to $125,000 for individuals and $200,000 for joint applicants, with the requirement that applicants intend to occupy the purchased property.
Introduction of the Regional First Home Buyer Guarantee (RFHBG)
To support homeownership in regional areas, the government has introduced the Regional First Home Buyer Guarantee, offering 10,000 places annually until 30 June 2025. This scheme allows eligible regional home buyers to purchase a home with a deposit as low as 5%, without paying LMI. Applicants must have lived in the regional area for at least 12 months prior to applying.
Family Home Guarantee (FHG) for Single Parents
The Family Home Guarantee provides support for eligible single parents and legal guardians with at least one dependent child to purchase a home with a deposit as low as 2%. For the 2024–25 financial year, 5,000 places are available under this scheme. Eligibility criteria include income thresholds of up to $125,000 per annum, and applicants must intend to occupy the purchased property.
Banning Foreign Buyers of Established Homes
In an effort to increase housing availability for Australians, the government has implemented a two-year ban on foreign buyers purchasing existing dwellings, effective from 1 April 2025. Additionally, the Australian Taxation Office (ATO) has been allocated funding to enforce this ban and address land banking by foreign buyers, ensuring that vacant land is utilized productively within a reasonable timeframe.
Energy Bill Rebates Extension
To alleviate cost-of-living pressures, the government has extended energy bill rebates to December 31, 2025, providing households with an additional $150 off their energy bills this year. This measure aims to support homeowners in managing their utility expenses.
Implications for Home Buyers
These initiatives reflect the government’s commitment to addressing housing affordability and supporting Australians in achieving homeownership. Prospective buyers should assess their eligibility for these programs and consider how the changes may impact their home loan options. Consulting with financial advisors or mortgage brokers can provide personalized guidance tailored to individual circumstances.
For more detailed information on these schemes and to determine eligibility, visit the Housing Australia website.
By staying informed about these developments, home buyers can make strategic decisions and take advantage of the opportunities presented in the 2025 Federal Budget.