Treasury has released the exposure draft Program Directions for the Help to Buy scheme. Background.
The instrument sets out the residential property price caps that apply to the program. These price caps restrict the purchase price of the relevant property that may be purchased under Help to Buy. The intention of the price caps is to support applicants to purchase modest homes.
The States are divided into two categories: the first category is the capital city and regional centres, and the second category is the rest of the State. Each State has higher price caps in the capital city and regional centres, and lower caps for other regions, which is reflective of the housing market and differing price points based on location.
The Instrument also includes the income thresholds for applicants and participants to be eligible for the program. The income threshold for a single participant is $90,000 and, for joint participants, the combined income threshold is $120,000.
For existing dwellings, Housing Australia’s maximum contribution is 30 per cent of the purchase price of the property. For new homes, Housing Australia can contribute a maximum of 40 per cent of the purchase price for the home (typically consisting of the contract price for the construction and purchase price for the land).
To ensure that all participants can avoid lenders’ mortgage insurance Housing Australia must ensure that the Commonwealth’s contribution, in addition to the participant’s deposit, is at least 20 per cent of the assessed value.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
