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2020-09-23 Property Tips
Author: Satterley

The 2020 First Home Buyer Guide

Are you considering building or buying your first home but are left confused about what grants and concessions you’re entitled to, and the costs involved with owning a home?

Whether you’re in the early stages of saving for a deposit or you are ready to sign on the dotted line, this guide will keep you on track to owning your first home, and on budget.

Here is an overview of the perks - government grants, rebates and concessions that you may be entitled to, and the payments - the most common costs associated with owning a home.

What perks on offer can save you money?

The Perks…

Australian Government’s HomeBuilder Grant

The HomeBuilder Grant is a $25,000 tax-free grant available to eligible owner-occupiers who build a new home or undertake a substantial renovation. To access the grant, buyers must have a construction contract signed by 31 December 2020.

To take advantage of this grant you will need to commence construction within three months if you live in Western Australia or Queensland, or six months if you live in Victoria.

To be eligible, singles must earn less than $125,000 a year or $200,000 per couple.

Satterley, Australia’s leading residential land developer, has titled land ready and available now in various award-winning communities in Western Australia, Queensland and Victoria.

In addition to the national HomeBuilder Grant scheme, each state and territory have their own building bonuses, concessions and rebates.

First Home Owner Grant (FHOG)

The FHOG is a one-off government payment to encourage and help first home buyers to buy or build a new residential property. The grant amount and eligibility requirements vary depending on where you live in Australia and is outlined below for the states of Western Australia, Victoria and Queensland.

Western Australia

To stimulate the economy and create more jobs during Covid, the WA Government announced a $20,000 Building Bonus for new home builds and some off-the-plan contracts. The great thing about this bonus is that it is not income means tested and there is no cap on property value, however you must enter a building contract by 31 December 2020.

The WA Government’s First Home Owner Grant is $10,000. If you combine this grant with the Building Bonus and national HomeBuilder Grant, you could qualify for up to $55,000.

Victoria

The HomeBuilder Grant can be combined with the Victorian Government’s First Home Owner Grant of $10,000 in Melbourne metro or $20,000 in regional areas, which means you could access up to $45,000.

Queensland

The Queensland Government’s First Home Owner Grant is $15,000. This year the State Government also announced a further $5,000 for people in regional areas, known as the Regional Home Building Boost Grant. These grants, combined with the HomeBuilder Grant, provide first home buyers with up to $45,000.

Stamp Duty Concessions

Stamp Duty is a tax charged by your state government for owning a property. Fortunately, the majority of first home buyers will be exempt from stamp duty or be eligible for concessional rates if over the exempt thresholds below.

NO stamp duty is charged in metro areas on purchasing:

  • House and land up to $600,000 in Melbourne
  • House and land up to $550,000 in Brisbane
  • Land up to $300,000 in Perth

House and land examples in Satterley’s most popular communities…

Melbourne

Botanical Estate, Mickleham

3-bedroom x 2-bathroom home on a 400sqm block costs approximately $479,000

$0 Stamp Duty payable

Plus, you may be eligible for up to $35,000 in grants

Perth

Heron Park Estate, Harrisdale

3-bedroom x 2-bathroom home on a 275sqm block costs approximately $364,000

$0 Stamp Duty payable

Plus, you may be eligible for up to $55,000 in grants

Brisbane

Ripley Valley, Ripley

4-bedroom x 2-bathroom home on 375sqm block costs approximately $418,000

$0 Stamp Duty payable

Plus, you may be eligible for up to $40,000 in grants

It is important to speak to a professional when making any financial decisions for you and your family.

The Payments…

Owning a home is a major achievement and an exciting time but there are some costs involved. Luckily, all the grants and concessions available make these costs less daunting. Some of the common costs associated with owning a property include:

Loan Application Fee

Once you or your mortgage broker apply for a home loan from a lender of your choice, there is usually a one-off fee to establish the loan. As an example, the fee might be $500 based on a loan of $350,000.

Lenders Mortgage Insurance (LMI)

If your deposit is less than 20 per cent of the home loan, some lenders may require you to pay a one-off fee that can be added to the loan. LMI protects the lender against any loss it may incur if you are unable to repay your loan. For example, on a loan of $500,000 with a $50,000 deposit (10 per cent) you could be paying around $10,000 LMI. It is worth doing a comparison online or speak to your mortgage broker as some lenders do not charge LMI.

Mortgage Registration Fee

This fee is charged by state and territory governments to register your property as security on a home loan. This is a minor fee usually between $100-$200 payable when you establish the home loan.

Land Transfer Fee

This minor fee is the cost of transferring land from one owner to another.

One thing is certain, there are many perks to being a first home buyer in 2020. Don’t miss your opportunity to access these once-in-a-lifetime grants and enter Australia’s property market.

Before making any major financial decisions, it is always a good idea to seek professional advice.

Additional Resources:

Apply for WA grants

Apply for Victorian grants

Apply for Queensland grants

Australian Government land transfer calculators

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