Help for First Home Buyers
JOHN MCGRATH
20/07/2020 | 3 MIN READ
There is so much help available to young people to make their first home purchase today but it appears many of them don’t know it.
A survey by Aussie Home Loans found 85 per cent of young buyers did not know what the First Home Loan Deposit Scheme was and 32 per cent didn’t understand any of the other assistance packages available.
So, today I’m going to lay out all that is available to first home buyers.
We’re talking tens of thousands of dollars here, so it’s worth paying attention if you’re in this group.
This is your one-stop guide to understanding the basics of all the major assistance packages available to in NSW, Victoria, Queensland and the ACT.
Stamp duty savings
Stamp duty is one of the biggest costs of buying but if you buy under the following price thresholds you can save tens of thousands.
In NSW, you can save up to $24,585 in stamp duty, with none payable on new or established properties up to $650,000 (concessions up to $800,000). More Info
In QLD, you can save up to $15,925 in stamp duty, with none payable on new or established properties under $550,000 through the First Home Concession Scheme. If your purchase price is higher, you can still save up to $7,175 under the general Home Concession Scheme.
In VIC, you can save up to $31,070 in stamp duty, with none payable on new or established properties of $600,000 or less and concessions available up to $750,000. More info
In ACT, you’ll pay no stamp duty if you (and your partner) earn less than $160,000 gross (or more if you have kids). On a $500,000 home, you can save $11,400. More info
Buy with just a 5% deposit through the First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme is a Federal Government initiative that offers 10,000 loan guarantees per financial year.
You can buy a new or existing property with just a 5 per cent deposit and a guarantee on the rest of the usual 20 per cent you need to get a loan without mortgage insurance.
There are income caps of $125,000 for singles and $200,000 for couples.
There are purchase price maximums that vary by state, territory, city and region. See below. More info
$700,000 in Sydney, Newcastle, Lake Macquarie, Illawarra and $450,000 elsewhere in NSW
$475,000 in Brisbane, Gold Coast, Sunshine Coast and $400,000 elsewhere in QLD
$600,000 in Melbourne and Geelong and $375,000 elsewhere in VIC
$500,000 in ACT
HomeBuilder
The $25,000 HomeBuilder grant is available if you build a new home for $750,000 or less; or renovate a home purchased for less than $1.5 million, with a minimum $150,000 to be spent on renovations.
There are income caps of $125,000 for singles and $200,000 for couples.
Contracts must be signed by December 31, 2020. More info.
First Home Owner Grants
These are cash payments to help you with your purchase. The amounts and criteria vary as follows.
In NSW, there is a $10,000 FHOG if you buy land and build a home for $750,000 combined or less, or you buy a brand new or substantially renovated home for $600,000 or less
In QLD, there is a $15,000 FHOG if you build or buy a new property; or a substantially renovated established property valued up to $750,000
In VIC, there is a $10,000 FHOG if you buy or build a new home for $750,000 or less. This is doubled to $20,000 if you buy or build in regional Victoria before June 30, 2021
Help saving your deposit via First Home Super Saver
You can make voluntary contributions into your super fund of up to $15,000 per year ($30,000 total), which has two benefits.
You’ll pay just 15 per cent tax on that work income (instead of about 30 per cent) and you can withdraw the funds, plus associated investment earnings, when you’re ready to buy.
But I’d advise you to get financial advice on this. More info
You can use any of these in combination and on top of all this, you can take advantage of the lowest home loan interest rates since the 1950s. This makes 2020 an incredible time to buy your first home.
The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.
This article originally appeared in The Real Estate Conversation (July 20, 2020)