Eligible first homebuyers purchasing new or existing homes to benefit from savings
Although time may have run out for those Victorian first homebuyers looking to purchase an existing property with the assistance of the First Home Owner Grant (FHOG), there is still help at hand for first time buyers considering entering the property market.
While the state's $7,000 FHOG increased from 1 July 2013 to $10,000 and now applies only to newly constructed homes up to the value of $750,000, buyers of existing properties should take note that there are still government incentives available to them.
A stamp duty concession is available to all types of first homebuyers, whether they are purchasing a new or existing home. In fact, the reduction has recently increased from 30% to 40% off the normal stamp duty rate for those who enter into a contract on or after 1 July 2013, for properties valued up to $600,000.
To be eligible for the stamp duty reduction, the first homebuyer must reside in the property for a continuous period of 12 months commencing within 12 months of settlement.
Local Mortgage Choice mortgage broker, Ebony Curtis said, “While first time property purchasers looking to buy an existing home may no longer be eligible for the First Home Owner Grant, they are encouraged to consider the possible savings on offer by way of the larger stamp duty concession.”
For example, the normal rate of stamp duty on a $400,000 home loan equates to approximately $16,370*. But if you take into account the 40% duty reductions available to eligible first homebuyers, a saving of over $6,500 is possible, which is only approximately $500 short of the previous $7,000 FHOG.
"Those first homebuyers who want to take full advantage of the government incentives currently available are encouraged to do their sums and ensure that they are fully prepared for the cost of home ownership. It's important that they factor in expenses including, but not limited to, legal expenses and insurance to removalist costs and furniture," Ebony said.
"A good first step for potential buyers when looking to enter the market is to contact their local mortgage broker, like myself, to arrange loan pre-approval. Not only will this allow them to hunt for a home with a clear picture of their borrowing limit in mind, but it will help them get one step closer to their property ownership dreams."
For further information, call the office on 039585 7779, visit 302 Charman Rd, Cheltenham VIC or log onto www.mortgagechoice.com.au/anthony.smith/