How First Home Buyers can save $80,000 with these 4 government schemes
With the Government’s recent announcement of the new home builder scheme available until 31 December 2020, first home buyers can now really “cash in” with up to $80 000 of savings across 4 available government schemes aimed at targeting first home buyers.
But some of these schemes are only available for a limited time, so you may need to act fast.
What does this mean for first home buyers? This means there is no better time to enter the property market if you are searching for your first home or renovate an existing property into your dream home.
But we understand that it can be quite a daunting task to unwind what benefits are available to you and how to apply for each of the benefits.
Here, we have outlined for you what Government Schemes are available for first home buyers and explain how you can reap the maximum benefits.
First home buyer schemes currently available:
There are four schemes and grants available if you are seeking your first home. These are targeted to first home buyers to help you save for your loan deposit, help to boost your deposit, provide stamp duty concessions which helps to reduce your purchasing costs, and the new home builder scheme just announced which provides benefits for new homes and renovations.
We have listed out these 4 schemes for you and their benefits, and show you how you can access up to $80 000 to help you into your first home.
- First Home Loan Deposit Scheme (FHLDS)- up to $20 000
https://www.nhfic.gov.au/what-we-do/fhlds/
This scheme was introduced to help first home buyers purchase a home sooner. This is achieved by the Government providing ‘guarantee’ over your loan (at over 27 participating lenders) which means that first home buyers can apply to purchase a home with only a 5 per cent deposit without needing to pay for lenders mortgage insurance.
This federal initiative is accessible if you earn under $125,000 as a single or $200,000 as a couple. That could be a saving of $20,000.
But places are limited – 10,000 scheme places will be released for the next financial year from 1 July 2020.
Property price thresholds- To ensure that the scheme goes to families who really need the assistance, there is a property price threshold with the highest threshold being a maximum purchase price of $700,000 in NSW capital city, or regional centres. This threshold changes per city so be sure to check the https://www.nhfic.gov.au/ website for more details.
- First Home Owner’s Grant (New Homes) Scheme- $10 000
This is a NSW State Government initiative to assist first home buyers into the market if they wish to buy or build a new home with access to a $10 000 grant. To qualify, the purchase price of your new home can not exceed $600 000 threshold. If you are buying land to build a new home, the total price (including the land and the home) must not exceed $750 000 total. There may be similar schemes available if you are looking to buy in other States as this is one restricted to NSW.
- First Home Buyer Assistance Scheme (FHBAS)- $25 000
https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/assistance-scheme
This is another NSW State Government Scheme which allows first home buyers to access a concessional rate of transfer duty (stamp duty) or even access an exemption from paying stamp duty altogether.
The full exemption is restricted to a maximum purchase price of $650 000 meaning that if your home is valued up to this, you don’t have to pay transfer duty (stamp duty). This means a saving of $25,000 in NSW.
If your home is valued between $650 000 up to $800 000 you can still get some benefits, and apply to only pay a concessional rate of stamp duty.
The amount you need to pay will depend on the value of your home.
There may be similar schemes available in other states, so if you’re located outside NSW please check your State Government first home buyer schemes to see if you are eligible.
- The New Home Builder and Renovation Scheme- $25 000
https://treasury.gov.au/coronavirus/homebuilder
This is a Federal Government initiative brought with the aim to stimulate the construction industry from the impact of the Covid-19 pandemic.
This scheme provides a grant of $25 000 to build a new home or substantially renovate an existing home.
There are a lot of requirements to access this one, so it isn’t available to everyone.
To access this $25 000 grant you must satisfy this main criteria:
- For singles, taxable income less than $125 000/year and for couples, taxable income less than $200 000.
- Deadline of 31 December 2020 to enter a contract to renovate or build and construction must commence within 3 months of the contract date.
- Renovations must meet a total spend between $150 000 to $750 000 and the value of the house you’re renovating must be less than $1.5million prior to the renovations. This excludes external works like swimming pools, sheds, etc.
- For new builds, the total value of the completed home can not exceed $750 000 including the land.
First Home Buyers Scenario: Winner takes the lot!
So the big question here is, how can you really maximise these benefits to ‘cash in’ and take advantage of these schemes?
To really access the maximum, you will need to buy a new home or build a new home to a maximum property value of $650,000 as a First Home Buyer in NSW.
Utilising the First Home Buyer Assistance Scheme, you will only require a 5% deposit which means for a new home of $650 000 this is a deposit of $32 500 (but keep in mind your income can not exceed the thresholds of up to $125,000 as a single or $200,000 for a couple).
Examples of 5% deposit
$650,000 X 0.05 = $32,500
Using these 4 Schemes combined, here is how you can really access the whole Kit and Kaboodle!
First Home Loan Deposit Scheme:
You will only require a 5% deposit, and save on Lenders Mortgage Insurance. This will potentially save you up to $20,000
First Home Owners Grant
In NSW, you will receive a bonus $10 000 from the State Governments First Home Owners Grant.
First Home Buyers Assistance Scheme
For your purchase in NSW, you will not have to pay transfer duty (stamp duty) saving you $25,000.
Home Builder Scheme
Because you are buying or building a new home, you can receive the Federal Governments Home Builder Scheme which is an extra $25 000!
That’s around $80,000 in savings or cash back that you can receive as a First Home Buyer.
So what are you waiting for? Why not let the State and Federal Governments give you a helping hand?
Because the next six months could be the game changer you have been waiting for to get you into your first home, there really is no better time to be buying.
Now you’re asking how do you access these schemes and build a new home within the time limits? That’s easy!
With your time restricted to the next 6 months to find a suitable block of land, builder, and sign your fixed price build contract it seems a little daunting, but we are here to help!
It’s simple. Speak to me and Lloyd Edge (Buyer’s Agent).
Working with us together, you will be able to access a unique service that no other Broker or Buyer’s Agent can provide to you.
Lloyd Edge is the Director and founder of Aus Property Professionals, a multi- award-winning Buyer’s Agency, and working with us together, you will be able to leverage from both our expertise.
We will help you to take full advantage of these 4 schemes and give your first steps into home ownership a HUGE boost.
How you can get started now- 12 steps to your new home:
- Get your 19-20 Tax return completed ASAP – Notice of Assessment will be required
- Have your broker apply for the FHLDS – New applications begin in July
- Get a Borrowing Capacity assessment by your broker
- Speak with your buyers’ advocate to begin the search for a suitable location and property design to match your Borrowing Capacity guidelines
- Get a pre-approval for your new home through your broker
- Find land and a builder through your buyers’ advocate
- Apply for your First Homeowners grant and Stamp Duty Exemption – Conveyancer assistance
- Settle on Land and sign build contract – buyers advocate assisted
- Apply for the Homebuilder scheme – We will assist
- DA approval and build starts within 3 months – buyers advocate assisted
- Build is completed
- Move into your brand-new house!!
Not a First Home Buyer?
If you are not a First Home Buyer, don’t worry- we can still help you to take advantage of the Home Builders Scheme and get you into a new build home.
By using the right experts, you could be moving into your very own freshly built house very soon.
To book a time to discuss this opportunity, please CLICK HERE.
Normally, an initial 1 hour chat will give me all the information I require to run the figures and calculate your options.
I look forward to speaking with you soon.
Kind Regards,
Jason Hare
Mortgage Broker & Finance Consultant
jason@opfinance.com.au
Mb: 0400-805-206
Mb: 0497-408-422 (PA)