Single parent housing joy

SINGLE parents will be big winners in next week’s federal budget, with the government set to introduce a scheme that will get them into the property market with only 2 per cent of the sale price saved.

The government will on Saturday release a threepronged strategy to boost home-ownership rates, with a special focus on getting more single mums into their own homes.

From July, single parents with dependent children will be able to buy a home with as little as 2 per cent of a deposit with the federal government guaranteeing the remaining 18 per cent.

The scheme, to be called the Family Home Guarantee, is based on the successful First Home Loan Deposit Scheme (FHLDS) — which helps first home buyers who have saved a deposit of 5 per cent — and will be limited initially to 10,000 people.

But the government is hinting it will expand it when those loans are exhausted as it estimates there are 125,000 single parents with dependent children who are eligible, of which more than 80 per cent are women.

Other measures to boost home ownership rates to be announced on Saturday include increasing from $30,000 to $50,000 the amount that can be released under the First Home Super Saver Scheme and adding another 10,000 places to the FHLDS to be called the New Home Guarantee, which will be confined to new builds.

Josh Frydenberg said housing would be a centrepiece of Tuesday’s budget.

“This budget is about more homes for more people to support their families and increase their quality of life,” the federal Treasurer said.

Mr Frydenberg said the initial 10,000 loans were a “first step” and the government would evaluate what further support was needed based on demand and the implementation of the program.

“This is giving an opportunity to single parents with dependants with a household income under $125,000 to get into home ownership,” he said.

“We will go further based on the success of this program.”

The Family Home Guarantee will have identical price caps to the existing FHLDS, which restricts the amount purchasers can spend on a property depending on its location. In Melbourne and regional centres in Victoria, single parents will be able to buy a property worth up to $600,000 and $375,000 in the rest of the state.

To qualify for the scheme a single parent will be allowed to earn up $125,000 a year — excluding child support payments — and can apply until their child turns 21 as long as they are wholly or substantially dependent on their parent and earn less than $6403.