The Time has Come for First Home Owners to Join the Property Ladder

The Time has Come for First Home Owners to Join the Property Ladder
Vivian NguyenJune 24, 2020

First home buyers often consider Sydney as overpriced and not an affordable location to purchase property. However, in the current market, this is not entirely true. If you are eligible for the State and Federal Government Grants now available, you can save up to $57,432*!  Hence, it is now the time to strike while the iron is hot by focusing, reviewing and taking advantage of the outstanding grants and stamp duty concessions accessible to first homeowners.

The First Home Owner Grant of $10,000 has been available since the 1st of January 2016 and is ongoing, however, the $25,000 Home Builder boost is set to expire on the 31st of December 2020.

In relation to Stamp Duty savings and concessions for first homeowners, they are state-based and thus, vary. In the example below we will review New South Wales (NSW) specifically:

  • $350,000 maximum purchase price land only -$350,001 - $450,000 concessional discount
  • $650,000 maximum purchase one contract - $650,001 - $800,000 concessional discount

NSW First Home Owner Grant 

The First Home Owner Grant for new homes has been established for any purchase on or after the 1st of January 2020. If you are buying or building a new home, you may possibly qualify for the $10,000 grant. It is offered for the following purchases; however, you must meet the other eligibility criteria:

  • Newly constructed home or a substantially renovated home with a total value less than $600,000
  • Land for building and house packages you intend to build has a combined value of less than $750,000.

What do you need to do?

The first step on your homeownership journey is to speak with a finance broker and find out your maximum borrowing capacity. If you have been overspending on credit or debit cards, now would be a good time to stop as lenders will review the last 3 months' statements on all cards. They will base your borrowing capacity on the following factors and may even request further information:

  • Employment length with your employer
  • Gross Income excluding super
  • Savings/cash or shares
  • Assets
  • Liabilities such as:

What would the grants and concession mean for you?

If you purchase the right type of property you could save tens of thousands of dollars in cash grants and stamp duty concessions. Based on a $600,000 purchase in NSW, the stamp duty saving alone would be $22,432. If you could access the $25,000 Home Builder boost and the $10,000 First Home Owners Grant, combined that would save you $57,432*.  The question is, how long would it take you to save that amount of money?

For example, if you saved $200 per week it would take you about 287 weeks to save that amount or just over 5 ½ years!

Although your first home may not be your dream home, think of it as a stepping stone for your future. Think of the benefits of receiving these grants and consider the questions below as you plan your future:

  • Where can I purchase my own home?
  • Can I afford to do this?
  • Am I eligible for the grant, rebates, and concessions?
  • How much can I borrow?
  • How much savings do I require?
  • What time frame do I have?

With that being said, the window of opportunity is very narrow, so it is time to take advantage of these grants and become a property owner.

Vivian Nguyen

Vivian Nguyen is a junior content creator and writer who is passionate about architectural design, urban planning and property development.

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