As a first home buyer, you can currently access a number of government incentives which are available through the federal and state government to help you buy your first home.
First Home Builders Scheme
The most recent scheme which has been introduced by the federal government is the first home builder scheme, which has been introduced as a result of COVID-19. This scheme can provide you with a $25,000 cash grant to put towards a new home up to the value of $750,000. Unfortunately, this scheme hasn’t been rolled out yet but when it does, information will become available through revenue New South Wales.
First Home Owners Grant
The federal government has also introduced the first home owners grant, which also provides a $10,000 cash grant which you can put towards your new home. This government scheme is available right now. While these schemes are used for new builds, there are also a number of government incentives which can help you purchase an existing home. These government schemes can help you save for your deposit and also help you save on lenders mortgage insurance.
Lender’s Mortgage Insurance
If you don’t know what lender’s mortgage insurance is, it’s a policy the banks can require you to take out if you don’t have enough of a deposit to put towards your loan. This essentially protects the banks should you default.
First Home Loan Deposit Scheme
The first home loan deposit scheme is another scheme the federal government have recently introduced and it allows purchasers to place as little as a 5% deposit to secure their finance. The federal government will guarantee up to 15% of your loan, meaning that you will not need to take out this expensive insurance policy.
You can also make voluntary contributions into your superannuation through the federal government super saver scheme. If you do want to take advantage of this scheme, it’s a good idea to contact your superannuation fund before you make arrangements with your employer to make those voluntary contributions. There are however a number of strict timelines and procedures you’ll need to follow so it’s a good idea to visit the Australian Tax Office website. Lastly, you can also save on stamp or transfer duty if you’re a first home buyer. This is a statewide scheme which allows purchasers to save on stamp duty for a purchase up to $650,000 or receive a reduction on stamp duty should your purchase be up to $800,000 dollars.
Each of these schemes can be used in conjunction with one another or if you’re eligible, you can actually use all of them together.
If for example you and your partner are first home buyers and you’re keen to purchase a house and land package $600,000 and you both have a combined taxable income of up to $180,000, you may be eligible to combine all of these schemes together and save you up to $80,00 in tax, insurance and building costs.
What to do next
It’s important to remember every circumstance is different so if you want to get some further advice, please give us a call at Turnbull Hill Lawyers.