More first home buyers are entering the Australian property market, according to figures released by the Australian Bureau of Statistics in November 2017, a likely result of a combination of factors including low interest rates, a softer market, better buying conditions as well as a number of State-led initiatives aimed at helping first home buyers. Take a look at some of these.
In 2017, New South Wales and Victoria abolished stamp duties for first home buyers buying property worth up to $650,000 and $600,000, respectively. In New South Wales, homes priced between $650,000 and $800,000 also incurred a lower stamp duty, while a similar initiative was introduced in Victoria for homes priced between $600,000 and $750,000.
Earlier this year (2018), the Victorian and Tasmanian governments both launched new initiatives aimed at making housing more affordable for local borrowers.
A pilot shared equity scheme launched by the Victorian government kicked off in February 2018 and is designed to help low to medium income earners buy their first home. Targeting applicants with incomes up to $75,000 for singles or up to $95,000 for couples of families, the $50 million HomesVic scheme will assist up to 400 first home buyers.
The scheme provides up to 25 per cent of the purchase price of a dwelling leaving the buyer only needing to provide a 5 per cent deposit. The homes sold under the scheme are in 33 “priority areas”, including 85 Melbourne suburbs, 130 regional towns and suburbs and seven peri-urban towns. Once the properties are sold, buyers will pay the proportional interest which the government will reinvest into other homes.
Making it easier for first home buyers
In Tasmania, the Affordable Housing Strategy will see an additional $125 million invested into providing 1,500 new affordable homes for Tasmanians, along with a range of supports that will provide housing for around 2,000 households.
Minister for Human Services Jacquie Petrusma said that this initiative will continue the government’s commitment to building more affordable housing to meet increased demand and provide additional supply by addressing all housing needs across all demographics and regions.
“As part of our additional $125 million investment into affordable housing, $20 million over three years will also be quarantined for purpose-built homes for people living with disability,” Minister Petrusma said.
First Home Owner Grants
The nationally-funded First Home Owners Grant (FHOG) scheme provides eligible first home buyers with financial assistance through a one-off grant. To find out if you are eligible, visit the FHOG website and select your State.
First Home Super Saver Scheme
In July 2017, the First Home Super Saver (FHSS) Scheme was introduced, allowing voluntary concessional and non-concessional contributions to be made into a super fund when saving for a first home.
From July 2018, first home buyers can apply to release their contributions along with associated earnings to help fund the purchase of a first home. Savers can apply for the release of voluntary contributions up to a maximum of $15,000 from any one financial year and up to $30,000 in total across all years.
To find out if you qualify, visit the FHSS website.
Get in touch with a Mortgage Express broker if you’d like advice about accessing any of these first home buyer initiatives.
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