Current newspaper articles and online publishers have been actively promoting the emergence of First Home Buyers as the forecasted dominant market for 2019. These articles go on to outline what this buyer group is being faced with, what their questions are about home ownership, and in a way seek to outline whether it is an appropriate time for young people to enter the housing market.
Colliers International set about discovering further insights from First Home Buyers, asking them what their real questions are about buying their first property, and accessing current government initiatives.
In speaking with a number of young people about Residential property, we determined that there are two lines of thought. One, is that First Home Buyers active in the market have a mindset of optimism and ambition – these buyers appreciate the challenges they face but are determined to enter the market after spending time saving and budgeting – they are keen to get a foot in the door but have some final questions on the ins and outs of home ownership.
The second line of thought, and perhaps more astonishing, is the number of young people that have deemed home ownership unattainable. However, this mindset is not one that these young people have developed themselves, rather what they had heard or read online. The doom and gloom being promoted throughout the media has led to the adoption of a “I’ll never own property” mindset.
However, what is not being promoted are the current opportunities for the First Home Buyer that this tough market presents. Multiple Government and private incentives, reducing prices and multiple property purchase options are all lining up for positive purchasing conditions for First Home Buyers.
Of those that are active in their search for their first home we asked them what their questions are, as the finalise their property search.
1. If I purchase a property with my partner what are the implications of the First Home Owners Grant? And if we are to purchase a subsequent property can the Grant be applied again?
Only a single grant is payable towards a property transaction, not per person. If you are purchasing a property with a spouse, partner (or even with your parents), they must not have previously owned an interest in land in Australia which had a residence on it before July 2000, or previously claimed the grant.
In this instance if you are to purchase a property with a spouse or partner, and receive the grant, the second party in the property transaction cannot then re-apply should they purchase a subsequent home.
2. If I purchase a property with my partner/spouse what are the implications of the Stamp Duty exemptions?
Firstly, the Stamp Duty exemptions vary in each State. For NSW, Stamp Duty is waived for all new and existing homes valued up to $650,000 under the First Home Buyers Assistance Scheme (FHBAS). If the property is valued above $650,000 and below $800,000 the concessional rate is based on the value of the home.
In addition, if you purchase a property off-the-plan you can defer the payment of Stamp Duty for up to 12 months after you sign the agreement, or until the property is completed. This may assist many purchasers with cash flow management.
If purchasing with a partner or spouse, the same Stamp Duty exemptions apply as the First Home Owners Grant. Exemptions can only be applied to a single property transaction, and your partner/spouse cannot apply for the exemption a second time.
3. If I receive the First Home Owners Grant, what are the conditions? Do I need to live in the property?
Under the FHBAS you must; move into the new home within 12 months after buying the property and live there for at least six continuous months.
4. Can I apply for First Home Owners Grants if I purchase a property with others that may already own a home?
The FHBAS applies when 50% or more of buyers are eligible. If you are buying a home with others who aren’t eligible, you can still apply for the scheme if you and any other eligible buyers are purchasing at least half of the property, which is deemed a ‘shared equity arrangement’. However, a share equity arrangement will not apply if your spouse is one of the ineligible buyers.
5. I am making higher Super contributions, how can I access these funds for a deposit?
The First Home Super Saver Scheme (FHSSS) allows First Home Buyers to make contributions into their Super, which can be released at a later date. You can withdraw up to $15,000 made in a financial year –the maximum amount that can be released is $30,000. To be eligible to make releases from super you must;
- Be over 18 years old.
- Never owned a property in Australia.
- Not previously requested to issue a FHSS release.
- You will then have 12 months from the date of the first released amount to sign a contract to purchase your home.
Our team at Colliers International Residential recognise the pressures that some young people feel about the Residential property market. Our team are committed to assisting buyers at all stages of the purchasing cycle, even if they feel that they are not currently ‘in the market to buy’, which is why we have released our First Home Buyers Guide to buying off-the-plan in NSW.
This guide will outline the key incentives, processes and tips and tricks to assist you along your First Home Buyers journey!