Australia has launched a series of policies to encourage people to buy their properties. If you want to buy your first home, you must not miss the following information.
First Home Buyer Assistance Scheme (FHBAS)
New South Wales introduced First Home Buyer Assistance Scheme, which applies to purchases:
New home: transfer duty free for prices below $650,000; partial transfer duty relief for prices between $650,000 and $800,000.
Existing home: transfer duty free for prices below $650,000; partial transfer duty relief for prices between $650,000 and $800,000.
Vacant land: transfer duty free for prices below $350,000; partial transfer duty relief for prices between $350,000 and $450,000.
Application requirements
-Applicant must be over 18 years old.
-Applicant must be an individual, not a company or trust.
-Applicant must be Australian citizen or permanent resident.
-Applicant and his/her spouse must never have owned or co-owned residential property in Australia and must never have received an exemption or concession under this scheme.
-Move into the new home within 12 months after buying the property and live there for at least six continuous months.
First Home Owner Grant（FHOG）
A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home. If you purchase a newly built house, townhouse, apartment, unit or similar the purchase price must not exceed $600,000. If you purchase vacant land and sign a building contract with a builder then we add the value of the vacant land plus the value of the comprehensive home building contract plus the cost of any building variations done together, and combined cost must not exceed $750,000.
First Home Owner Guarantee (FHBG)
The First Home Owner Guarantee (FHBG) is an Australian Government initiative aimed at assisting Australians to purchase their first home. Under the FHBG, applicants can borrow up to 95% LVR without paying LMI. Property must be within the given price caps to be eligible for the First home guarantee scheme. The highest threshold is in Sydney and Melbourne with $900k and $800k respectively. There are certain requirements to fulfill in order to be eligible for the FHBG:
-Not have owned property in Australia before.
-Be an Australian Citizen.
-Earning up to $125k income for a single applicant and up to $200k for a couple.
-Intends to reside in the property.
-Minimum 5% deposit as genuine savings.
First Home Super Saver Scheme（FHSS）
From 1 July 2017, in addition to the employer’s contribution to the employee’s super, employees can use a part of their pre-tax income to deposit in their accounts. Savings and interest can be used as a down payment. The maximum contribution is $30,000 within two years, with a maximum of $15,000 per year. This money will be taxed at a discount to reduce the pressure on buyers. Starting in July 2018, first home buyers will be able to submit an application to withdraw their savings as a down payment. For eligible applicants, they can withdraw roughly $50,000. However, this scheme has a limit on the amount of contributions, and after Australian Taxation Office approves the application, people can withdraw funds; meanwhile, applicants must purchase or build the property within 12 months, otherwise they will face tax problems.
First Home Buyer Choice
New South Wales officials announced the reform of transfer duty tax, decided to introduce land tax and gradually abolish transfer duty tax. According to the official website of the NSW government, qualified first-time buyers can apply for and choose to pay land tax from January 16, 2023. First time homebuyers who meet the conditions and choose to participate in the First Home Buyer Choice plan will not be required to pay transfer duty, but will pay a tax of $400 per year, plus 0.3% of the land value of the property. During the transitional period of the implementation of the reform, qualified first-time home buyers will receive refunds of the transfer duty tax paid. If the buyers are willing and have not paid the land tax, they can still choose to pay the transfer duty tax.
Questions about the First Home Buyer policies? Contact your professional mortgage brokers at MoreMore Finance, to get more detailed information.
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