July 24, 2013
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.
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.
A good first step if you are looking to enter the market is to contact a local mortgage broker, like us, to arrange loan pre-approval. Not only will this allow you to hunt for a home with a clear picture of their borrowing limit in mind, but it will help you get one step closer to your property ownership dreams.
To find out more about purchasing your first home please call us on 03 9432 6070 or click on the 'contact us' tab at the top of this page.
*Sourced from State Revenue Office of Victoria website.