October marked the start of a new incentive for first home buyers in NSW. The $7000 grant for buying existing properties made way for a $15,000 bonus for first home buyers purchasing or building a new property valued up to $650,000.
In addition, first home buyers will no longer pay stamp duty on new homes valued up to $550,000, a maximum saving of $20,240.
But is the deal all it’s cracked up to be?
Many commentators have suggested that first home buyers should be wary and that the grant may not be ideally suited to all.
“The $15,000 will provide financial assistance for getting started in the property market. However, because it is limited to new properties only, I am unsure whether I will take advantage of it. Especially once you consider the mark ups in price for newly developed properties.”
Back in 2010 when larger than normal grants were offered to first timers, prices rose rapidly and there was an oversaturation of home buyers in the market. This contributed to house prices climbing over 21% in Sydney and by an even higher 24% in Melbourne.
$15,000 is a fair chunk more than the previous $7,000 grant yet Bonnie doesn’t believe it necessarily translates to a better offering for first home buyers.
“I would have preferred the $7,000 grant considering that not all the properties that interest me fall within the criteria of the $15,000 offer. I am the victim of poor timing and would have much preferred the $7,000 and free stamp duty concessions that were available and ended in December 2011.”
“In saying that, the new grant is attractive. I will just need to conduct further research on the criteria to understand any contingencies that I may or may not qualify for, such as whether stamp duty exemptions still exist on new properties whilst also offering the $15,000.”