John McGrath, founder and executive director of McGrath Estate Agents outlines the help available to those who want to step into the property market for the first time.
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.
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
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.
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
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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.
For more information including articles, checklists, guides and more visit McGrath’s Insights Centre
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