Are you planning on buying your first home? Well, you are not alone. Many individuals buy their first residential property for financial gains or other reasons. Whatever your reasons are, there are several advantages to purchasing your first house, such as:
Growth in Property Value: Land values appreciate over time, providing potential long-term benefits to the homeowner. Higher values usher in capital growth and build wealth over time.
Tax Benefits: First-time buyers are often eligible for several new home deposit schemes, stamp-duty exemptions, etc. Moreover, they can claim deductions on mortgage, interest, renovations and more. You can maximise the tax benefits as long as the records and documentation of expenses are maintained.
Financial Stability: Inflation can impact purchasing power and lead to cutbacks on overall expenditure. However, you can beat inflation with appreciating assets like property. The value of your home will gradually increase, providing financial stability.
Building Equity: Your real estate equity is the difference between its estimated market value and the mortgage balance. With time, you can make a reasonable amount of equity in your place and convert it into cash through refinancing. This extra money can be used for buying a new car, renovations or other financial emergencies.
Set Up Your Dream House: Last but not least, owning a home gives you a free hand. You can customise it to suit lifestyle choices and needs. As an owner, you can explore several options and make your dreams a reality.
First Home Owner Grant (FHOG)
Buying your first property is a remarkable achievement. It builds financial stability and offers numerous other benefits. However, the rising cost of properties could make it difficult for you to buy a home today. Fortunately, exploring options for Cheaper Home Loans in Melbournecan make this dream more attainable. By securing a more affordable loan, you can ease the financial burden and take a significant step toward homeownership.
The government launched the First Home Owner Grant (FHOG) to encourage and provide first-time property buyers with financial support. It offsets the Goods and Services Tax (GST) effect on ownership. Under this one-off grant, you’ll receive funds to build or buy your first residential realty - a townhouse, apartment, standalone units, etc.
Currently, for urban homes valued up to$750,000 in Melbourne, you can get $10,000 under FHOG. Furthermore, as a first-time buyer, you are exempted from paying stamp duty for properties valued at $600,000 or less. Property owners can receive a concession for residential estates between $600,001 and $750,000.
Here’s the eligibility criteria for the first scheme:
Age:
You must be at least 18 years old.
Citizenship:
You must be a permanent resident or an Australian citizen.
Property Ownership:
When applying for the grant, you must be a first-home buyer.
First Home Super Saver Scheme (FHSS)
First Home Super Saver Scheme (FHSS) is another initiative by the federal government to help you pay for your first home. Under this scheme, you can make voluntary contributions of up to $15,000 towards your super account in the financial year. When you’re ready to purchase a house, you can withdraw this amount alongside any associated earnings.
There are two ways to contribute to the FHSS:
Salary Sacrifice Contribution:
Here, you give up a part of your before-tax salary. This also reduces your taxable income and helps you save on taxes.
Voluntary Contribution:
As the name says, you make voluntary deposits to your super fund from your savings. It helps you build up a first home deposit and claim tax benefits on the contributions made.
How to withdraw the superannuation fund?
When you are all set to buy a house, apply to the Australian Taxation Office (ATO) and request an FHSS determination. This will tell the maximum amount you can receive under the scheme. Following this, you can apply to get the super fund released.
First Home Guarantee
First Home Guarantee (FHG) is a part of the Home Guarantee Scheme (HGS). The initiative allows eligible first-time buyers to purchase properties with as little as a 5% deposit instead of 20%. Additionally, individuals don’t have to pay Lenders’ Mortgage Insurance (LMI), so that’s one less hassle.
Previously known as the First Home Loan Deposit Scheme, the program designates the government as the guarantor for the remaining deposit amount. It helps you receive loans with much lower deposits without paying LMI. This reduces the initial financial burden and makes it easier for first-time buyers to enter the real estate market. Moreover, since LMI is not included in the loan amount, you can save more on interest.
Get Your Free First Home Buyer Guide from Mortgage Friend
Are you thinking about buying a house in Melbourne? Perhaps, it’s your first time planning to purchase a property. The good news is that you’re not alone when you have Mortgage Friend. We'll help you with the home buyer guarantee scheme, FHLDS scheme and more.
From explaining the eligibility criteria for various grants to connecting you to suitable loan options, our team has your back. If you wish to know more, call us on 0407 949 044 or send us an email at jkassoc@arc.net.au.
