2020 could become the year of the first home buyer here in Lake Macquarie.
Not only are we seeing record low-interest rates, but we also have several generous State and Commonwealth government schemes, each of which is aimed at getting first home buyers into the market.
We take a look at grants, schemes and concessions you might qualify for if you’re looking to get onto the property ladder for the first time in Newcastle or Lake Macquarie.
What grants and schemes are available for First Home Buyers?
1. First Home Owner Grant
The NSW First Home Owner grant provides a one-off payment of $10,000 for new properties under $600,000.
You can make a claim for the First Home Owner Grant if:
- you’re buying a newly constructed home or a substantially renovated home for less than $600,000, or
- you’re building a new home and the dwelling and land have a combined value less than $750,000.
For example: New three-to-four bedroom homes in Jewells sell for $649,000 and you can buy land in Trinity Point, Morisset Park for around $400,000.
2. First Home Super Saver Scheme
The Commonwealth Government’s First Home Super Saver Scheme (FHSSS) lets first home buyers boost their savings using their superannuation.
You can save a home deposit of up to $30,000 (or a maximum of $15,000 per year) by making contributions to your super, which means they could be taxed at the superannuation tax rate of 15% and not your marginal income tax rate. You can then withdraw these voluntary contributions and use them towards your home deposit.
For example: This cute fibro cottage in Wangi Wangi is on the market for $395,000-$435,000 and to put down a 20% deposit you’d need to save up to $87,000. If you made extra contributions into the FHSS, you could potentially bring this down to as little as $57,000 plus what you’ve put into super. Blocks of land in Cameron Park start at $299,000 which would usually mean a 20% of $59,800 but you may only need $29,800 if you’d put aside $30,000 in the FHSS.
3. First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme is another Commonwealth Government initiative. It helps you get onto the property ladder without a large deposit by guaranteeing up to 15% of your home loan. This means you could potentially satisfy the lenders’ requirement of a 20% deposit with as little as 5% of the purchase price and won’t have to take out lender’s mortgage insurance (LMI).
To be eligible, you must be an Australian Citizen aged 18 or over and buying your first home as an owner occupier. An income cap of $125,000 applies to singles and $200,000 to couples. You also must be able to show that your 5% deposit is made up of genuine savings.
A maximum property value applies and varies depending on location. This is $700,000 for Lake Macquarie and Newcastle.
To apply, you need to go through one of the Scheme’s 27 participating lenders.
4. Homebuilder Scheme
First home buyers may be eligible to apply for the new $25,000 HomeBuilder scheme if they’re buying a new home or undertaking a major renovation. This scheme was introduced as a COVID-19 stimulus package for the construction industry and runs until the end of 2020.
The strict eligibility requirements for HomeBuilder include:
- Being an Australian Citizen over the age of 18
- Undertaking the building work as an owner-occupier (investors are not eligible)
- Meeting an income cap of $125,000 a year for an individual or $200,000 a year for a couple
- Signing a building contract between 4 June 2020 and 31 December 2020
- Commencing construction within three months.
The grant itself can be used for two types of residential construction:
- Building a brand new home valued at up to $750,000, including house and land packages or off-the-plan apartments.
- Undertaking a substantial renovation of your existing home (including a knock-down rebuild). However, the existing property must be valued at less than $1.5 million before the renovation and the renovation contract cost must be between $150,000 and $750,000.
For example: You could buy this premium block of land in a blue-chip location and use the Homebuilder grant towards building your dream home.
5. Extensions to the NSW Stamp Duty Concessions
Other than saving a deposit, the biggest upfront cost associated with buying a home is usually stamp duty (also known as transfer duty). However, help is at hand for first home buyers.
The NSW Government offers stamp duty concessions and exemptions for first home buyers buying new or established properties. On 1 August 2020, it actually increased the number of new and off-the-plan properties eligible for the scheme by lifting the thresholds for 12 months.
If you’re buying a new property as an owner/occupier and it’s your first home, the following concessions and exemptions apply.
- For properties under $800,000. No stamp duty is payable.
- Between $800,000 and $1 million. A concessional rate applies.
- Over $1 million. The full rate of stamp duty applies.
If you’re buying an established home, the following concessions and exemptions apply.
- Properties valued up to $650,000. No stamp duty is payable.
- Between $650,000 and $800,000. A concessional rate applies.
- Over $800,000. The full rate of stamp duty applies.
For example: This Coal Point home has lake views and is on the market for just $650,000 while this neat family home in New Lambton is listed between $700,000 and $750,000 and also qualifies for stamp duty concessions.
If you’re interested in making Lake Macquarie or Newcastle the location of your first home, contact our team today.