Why Now is the Time to Get into Your First Home
Entering the property market has steadily become a greater challenge over the last decade or so. Inflation, urbanisation, population growth and a range of other factors have increased competition, leaving many young people feeling as though they may never realise their dreams of property purchase. It’s not all bad news though.
The Government has stepped in and implemented some key support measures to assist Victorians looking to purchase their first home. Although many have experienced unexpected hardship over the last year and had put their ambitions on hold, now is a time to take advantage of entering the market.
Land Transfer (Stamp) Duty Savings on Residential Property
Prospective buyers should know that the latest State Budget included a reduction in land transfer or stamp duty costs for properties worth up to $1 million dollars. The saving includes a 50% reduction for new residential properties and a 25% reduction for existing ones. This means that the 50% saving will put up to $27,500 back into buyers’ pockets, while the 25% saving will offer up to $13,750 back, making it welcome news for both developers and those looking to purchase.
Prospective buyers should also know that stamp duty savings are not limited to first home buyers and are not means tested. Although that may be the group to whom they offer the most value, the savings apply to any purchases made before 30 June 2021.
Victorian Homebuyer Fund
On 24 November, the Victorian Government announced a $500 million pledge in the form of the Victorian Homebuyer Fund. The fund offers prospective property purchasers financial assistance by contributing to their purchase price in exchange for a proportional share of equity. This means that the Government will receive its share back when the house is eventually sold on, so that they can then use that money to help others get into their homes.
Details on the scheme are still currently a bit lacking, but it would appear that the fund has expanded upon the HomesVic Shared Equity Initiative, which commenced back in February of 2018. Eligibility details for HSEI can be viewed on this page.
First Home Owner Grant
The First Home Owner Grant offers $10,000 to eligible applicants in Metropolitan Melbourne and $20,000 to those in regional Victoria. The grant is applicable for homes worth $750,000 or less. In most cases, your bank or financer will lodge a FHOG application on your behalf – although you will need to confirm that this is the case. Take a look at the eligibility details here.
These are only three of a number of options designed to help Australians break into the property market. Other measures include a variety of a concessions, reductions and exemptions. It all adds up – if you’re able to combine a number of different types of assistance together, the purchase will become far more achievable.
With many different options available to cushion the blow of a property purchase, researching what’s applicable can make a serious difference.
If you have any questions about the above or which grants and support measures apply to you, get in contact with the team from Provide Finance.