Despite market conditions softening throughout 2019, many first home buyers still find it challenging to enter the market.
But with new and existing property concessions assisting first-timers, the opportunities for homeownership are more realistic than ever. We explore the current concessions you could be eligible for.
First home owner’s grant
If you’re a first home buyer looking to purchase property in an area like inner-city Sydney, there are a few things you need to know before you get started. Top of the list is the First Home Owner Grant.
In New South Wales, the state government offers the grant to first-time buyers with up to $10,000 towards the purchase of their home. To be eligible, you must be buying or building your first home. That property must be new and have had no previous tenants. It must also be worth no more than $750,000.
So long as you are an Australian citizen or permanent resident 18 years or older, and you intend to move into the property within the first year for a continuous period of six months, you may be eligible for the grant.
NSW’s stamp duty concessions
The state government has also designed a package that tackles housing affordability for first home buyers. It takes into account challenging buying conditions for newcomers entering the market, especially those who may face competition from investors.
That means stamp duty on all homes valued up to $650,000 is abolished for first home buyers, and you are also eligible for stamp duty relief on homes up to $800,000. Part of this initiative is to “no longer allow investors to defer paying stamp duty on off-the-plan purchases”, according to a NSW Government statement.
All added up, first home buyers can save up to $24,740 on ordinary stamp duty, and up to $26,857 total for a new or existing dwelling.
First home super saver scheme
Introduced nationally during the 2017–18 Federal Budget in order to reduce rising pressures on housing affordability, the first home super saver (FHSS) scheme is another weapon in the first-time buyer’s arsenal.
What the scheme essentially enables you to do is make voluntary contributions into your super of up to $30,000 and then withdraw that amount to help buy your first home (plus earnings, minus tax). These types of contributions could be either before-tax or after-tax contributions, or part of a salary-sacrifice program.
Taking advantage of this super saver scheme means you may end up paying less tax on your contributions – and therefore build a deposit quicker. Couples can also use the FHHS in their individual super accounts, allowing them to put together a combined total of up to $60,000.
First home loan deposit scheme
There’s one more property concession on the horizon for first home buyers. As one of the Morrison Government’s final promises leading up to the 2019 election, the First Home Loan Deposit Scheme is aimed at first-time buyers who may not have the capacity to generate a sufficient deposit for their first home.
Under the initiative, which will begin in earnest from 1 January 2020, the scheme will help eligible first home buyers purchase a property with a deposit as low as 5%. There’s up to $10,000 to be saved in Lenders Mortgage Insurance, and it’s available to first home buyers with an individual income of up to $125,000 (or $200,000 for couples).
Ready to use these concessions to your advantage?
If you’re a first home buyer looking to take advantage of a variety of current property concessions, get in touch with me today and I’ll help you find the perfect home to begin your real estate journey.