3 Ways First-time Property Buyers Can Get Help to get on the Property Ladder
While the latest ABS lending indicators around new loan commitments show first home buyers in New South Wales fell 3.7 %, below the national average fall of 1.5 %, they are still keen to get on the market.
Here are two ways:
1. Buy into Strata
In its latest NSW Market Update, property data specialists InfoTrak reveal First Home Buyers in the state are showing an increased inclination towards strata dwellings; from Q2 to Q3, this property type had a small uplift from 54 % last quarter to 54.39 % this quarter.
Established apartments or units in a small block in a great neighbourhood close to public transport and amenities are often within a first-time buyer’s budget and they make a great starter property for two reasons:
- Buy to live in it: and use it to either sell later down the track to upgrade to a bigger property or keep to use as an investment property.
- Rentvest: the owners to live where they want to live, but can’t afford to buy as a tenant, while still providing the opportunity to enter the property market investment property they can afford to. At the same time, they reap the benefits of tax deductions that go with an investment property.
2. Capitalising on Government Assistance Schemes
There are a number of schemes and grants available for first-home buyers to take advantage of:
- National government schemes available for first-home buyers:
The Home Guarantee Scheme (HGS)
The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to buy a home sooner. The Scheme is administered by Housing Australia on behalf of the Australian Government.
The Scheme includes three types of Guarantees:
- First Home Guarantee (FHBG) – supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%. For FY2024-25, 35,000 places are available.
- Regional First Home Buyer Guarantee (RFHBG) – supporting eligible regional home buyers to buy a home sooner, in a regional area, with a deposit as little as 5%. For FY2024-25, 10,000 places are available.
- Family Home Guarantee (FHG) – supporting eligible single parents and eligible single legal guardians of at least one dependent to buy a home sooner, with a deposit as little as 2%. For FY2024-25, 5,000 places are available.
More details about this scheme here.
The First Home Super Saver (FHSS) Scheme
This allows people to make personal voluntary contributions into their super fund to help save for their first home.
Concessional contributions are taxed at only 15%, which is usually less than your marginal income tax rate. Assessable FHSS amounts also benefit from a 30% FHSS tax offset.
You can withdraw up to $15,000 of your voluntary contributions from any one financial year, up to a total of $50,000 across multiple years, plus associated earnings.
More details, including eligibility about this scheme here.
Help to Buy Bill
The Government has just reintroduced the Help to Buy Bills to Parliament. Through this Buy scheme, the Government will support eligible homebuyers with an equity contribution of up to 40 % for new homes and 30 % for existing homes.
If it goes through, homebuyers will need a minimum 2 % deposit to participate in the scheme and will have lower ongoing repayments while they participate in the scheme, providing long term relief.
- NSW Government Assistance Schemes
First Home Buyers Assistance Scheme
First home buyers in NSW, may be eligible for a full exemption or a reduced rate of transfer duty under the First Home Buyers Assistance Scheme. Requirements of this scheme include:
- Buying your first home in Australia.
- The value must be less than $1 million.
- You must also move into the property within 12 months from settlement and live there for at least 12 continuous months.
More details about this scheme here.
First Home Owner Grant
A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home.
This first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.
More details about this grant here.
3. Alternative Finance Options
Some finance providers are pulling away from the traditional lending structure. For instance, Social Funding, a concept developed by the company MyBrix, has been developed. There are some options that allow home buyers and investors to split the cost of buying a home with family or friends while retaining individual control of their finances.
Then of course, there is always the bank of mum and dad! Keen to help out their adult children with deposits, lending from the bank of Mum and Dad is increasing; indeed, the Bank of Mum and Dad has become so large as a home loan enabler that the Productivity Commission says if it was an actual bank it would be somewhere between the fifth and ninth biggest mortgage lender.
We pride ourselves on doing more than selling and managing properties; we give extra tips and hints to help property owners and would be owners make informed decisions.
If you are thinking of selling, or want to know what your house could get in today’s market, contact us for a free, independent and non-obligatory quote. Our experienced team will also suggest quick and cost-effective upgrades to consider making so you can get the best price for your property.
Drop into our Cardiff office, give us a call on 02 4954 8833 or send us an email to: mail@apnewcastle.com.au.
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