Buying property in a highly developed country like Australia is an exciting as well as a nerve wracking task, given a plethora of options to choose from. Moreover, the financial obligations that need to be covered in buying a property also need to be researched and chosen in an appropriate manner. So, given such a wide range of options for you, what would be the perfect start for you?
There is good news for all first home buyers in Australia, i.e. your decision would actually be rewarding you with AUD $7,000 in cash in the form of Home Owner’s Grants which is a special offer provided by the Government of Australia since July 2000 with the basic purpose of assisting first home buyers in Australia. This scheme is valid in all states of the country, with minor differences in regulations. Ever since its inception in 2000, it has undergone several changes, and for the exact amount to be approved, it is imperative you refer to your state government regulations and laws.
To be eligible for the Home Grant Loan, here are the criteria:
Be an Australian Citizen or a Foreign resident residing with a permanent visa
Property should be specified for residential (non-commercial) purposes, i.e. home unit, apartments, flats, or fixed dwelling.
Grant must not have been claimed before
House must be possessed by the buyer within the first 12 months
Now that you are eligible, you need to check with your state laws to further evaluate your eligibility criteria. Some states have put minimum age restriction to apply for a home grant.
In New South Wales, Queensland and South Australia, the grant is offered for houses with a maximum price of $750,000. In Western Australia, first time home buyers are not liable to pay any stamp duty on houses with maximum price of $500,000.
In Southern Australia, first home buyers can get up to a maximum of $8,000 in First Home Bonus Grant with the maximum market value of the residential property at $400,000. Although these grants could be as welcoming and overwhelming as they sound to be, yet they are too good to be true. You obviously cannot buy a good residential property with $8,000. Unless you are a millionaire having abundance of wealth, you would still feel the compulsion to apply for a home loan from a financial institution.
Other than the home grants, you can get benefits in the form of discounted stamp duties, which are the levied taxes on the purchase price of a house that you buy. Stamp Duty for properties in between $500,000 and $700,000 need to be paid in full, whereas substantial discounts are available for those, having properties less than $500,000 in market value.
Savings deposit is what you have saved throughout your life, specifically for a big investment in a time of dire need. This is the time now, you are going to buy your first home, and a savings deposit alongside discounted stamp duties and home grants could provide you with financial assistance required to buy a new home. However that still would not be enough as you need to apply for a home loan. A good home does not cost less than $150,000, not to mention various costs that are apart from this purchase price, such as:
1. Legal charges
2. Property inspection charges & fees
3. Stamp duties
4. Property Insurance premiums
5. Council rates
6. Utility charges (water, gas, electricity)
Savings for deposit is a daunting task, given the rising costs of living, coupled with dwindling disposable household incomes. It is advised to adopt the ‘asset-stripping’ strategy in which you sell off your unused assets like cars, expensive jewelries, unused goods & household appliances such as fridge, TV, treadmills, etc. Try saving a small amount of your disposable income every month in a separate savings account for your new home.
To check the latest requirements and grant specifics visit the FHOG portal at firsthome.gov.au and then select your relevant state to be directed to the latest information.