We take a round-the-nation look at the latest changes to first home buyer grants and concessions.
Saving for a first home may not be easy but state governments offer a financial helping hand to help first time buyers make a start on the property ladder.
The key is to know what’s available in your patch as it could be the boost to your finances that gets you over the line and into your first home.
With big changes taking effect from 1 July, we look at what’s changed, what’s available, and how to make the most of some sweet free cash.
New South Wales
The Berejiklian government’s Affordability Package, which kicked in from 1 July 2017, should keep NSW first home buyers pretty happy.
The package abolishes stamp duty for new or established first homes priced up to $650,000 – an instant saving of up to $24,740, with discounts on duty available even on homes valued up to $800,000.
More good news. The NSW First Home Owner Grant (FHOG) of $10,000 is available for first timers who build a new home worth up to $750,000 or buy a newly constructed property valued at up to $600,000.
As an extra sweetener, NSW first home buyers with a small deposit will no longer pay insurance duty on lenders’ mortgage insurance. As a guide to the possible savings, on a home valued at $800,000, a buyer with a deposit of $50,000 who needs lenders’ mortgage insurance, could save $2,900.
It’s good news for first home buyers in Queensland with the $5,000 boost to the FHOG extended for another six months – it now ends on December 31, 2017. The Grant is available on the purchase of a newly built home priced below $750,000.
First timers in Queensland can also tap into handy stamp duty discounts available on both new and established homes. The maximum concession of $8,750 applies to homes valued up to $504,999, falling to $875 for a home costing $549,999. First home buyers planning to buy land now and build later pay no duty on vacant land costing $250,000 or less, with the stamp duty saving dropping to $525 on land priced up to $399,999.
First home buyers in Victoria can celebrate 1 July with the introduction of new measures that see stamp duty scrapped altogether on homes worth up to $600,000. Discounts on duty are available on a sliding scale on first homes costing between $600,001 and $750,000.
It’s even better for country Victorians, with the FHOG beefed up to $20,000 from 1 July 2017 for new homes valued up to $750,000 in regional Victoria.
Tasmanian first home buyers can also celebrate a boost of support. The State Government has extended the $20,000 FHOG for another year to 30 June 2018, after which the Grant drops to $10,000. To be eligible, first home buyers must buy or build a new home.
First home buyers in the west have been dealt a tough blow, with the First Home Owner Boost of $5,000 available for the purchase of new homes scrapped from 1 July 2017 – six months earlier than originally planned. As of 1 July, a $10,000 FHOG is still available but only for the purchase or construction of a new home.
On the plus side, WA first home buyers are exempt from stamp duty when they buy a new or established home worth up to $430,000 or vacant land costing up to $300,000. Discount duty applies to vacant land or a home costing up to $400,000 and $530,000 respectively.
Making the most of grants and concessions
Free money from the government is never something to sneeze at, and taking advantage of what’s available in your patch – even if it’s less than it used to be, is an important strategy to get a leg on the property ladder.
A good starting point is to know the price limit at which the maximum stamp duty concession cuts out in your state or territory. Then consider setting your buying budget below this.
It also makes sense to speak with your Aussie broker to know your borrowing power. This will go a long way to shaping your first home budget.
Next, decide whether you want a new or established home. Many of the juiciest concessions and FHOGs are reserved for newly built properties.
Then head to your Aussie broker who can crunch the numbers to explain exactly what you’re entitled to in the way of grants and concessions. Taking advantage of what’s on offer can take you a step closer to owning your first home.
You may also be interested in First Home Super Saver Scheme. How it could work for you, Is it time to think outside the box to get on the property ladder? and Four steps to help you buy a home this year.