Saving money to buy property, or even pay a deposit, can be very difficult especially when buying property for the first time. Fortunately, the government is currently offering a number of grants and schemes that can make it a little easier.
First Home Buyer Assistance Scheme
The First Home Buyer Assistance Scheme provides an exemption for first home buyers from having to pay stamp duty on their purchase. The requirement to pay stamp duty is completely waived for first home buyers purchasing a new or existing home for $650,000 or less or buying vacant land for $350,000 or less. A first home buyer may still be eligible for a partial exemption it the value of the property exceeds these amounts.
To be eligible for the scheme you and your spouse must never have owned any interest is residential property in Australia and at least one of the first home buyers making the application must be an Australian citizen or permanent resident. There is also an additional requirement that you must live in the property for 6 months within the first 12 months of buying the property.
First Home Buyer Deposit Scheme
An additional expense for first home buyers is lenders mortgage insurance (LMI). LMI can cost thousands of dollars and is required to be paid by first home buyers that have less than a 20% deposit saved to purchase a property. Under the First Home Buyer Deposit Scheme, eligible people only need to have a 5% deposit saved and the government will guarantee the remaining 15%.
However, there are currently only 10,000 places available between 1 July 2021 and 30 June 2022 for first home buyers to qualify for this scheme. You must also be an Australian citizen and have a taxable income of less than $125,000 for an individual or $200,000 for couples to be eligible. This scheme is not available for individuals with permanent residency status in Australia.
First Home Super Saving Scheme
The First Home Super Saving Scheme allows first home buyers to release funds from their superannuation to buy property. The benefit of this scheme is that purchasers can draw from their superannuation to help fund their purchase or pay a deposit. It also makes it easier to save for a deposit as funds put straight into your superannuation are usually taxed at a lower rate than income tax.
Importantly, only voluntary contributions you have made to your super fund can be released under this scheme. Super contributions made by your employer cannot be released. You can also only release up to $15,000 of voluntary contributions you have made from any one financial year. The total amount of voluntary contributions that can be released is capped at $30,000.
If you need any assistance with purchasing your first property, or any other property transactions, please contact a solicitor or conveyancer at Everingham Solomons because Helping You is Our Business.
Click here for more information on Nick Hawkins.