Buying a house can be one of the costliest things any Aussie has to face, especially if you do not have a deposit saved up or any support from the bank of mom and dad. The Aussie government has made purchasing a home a bit easier with first home owner incentives which differ from state to state. These are the five things that you need to know when it comes to home owner incentives.
1. Each state has its own criteria
The first home incentive differs from state to state. Therefore, you need to check what is applicable to your situation in the state that you are in. The incentive is also given to you based on the value of your property, which means that there may be a cap on the amount that can be applicable for the incentive that are provided in various states.
2. There is a cap amount on the transaction period
Another thing that you need to keep in mind is that there is an eligible transaction time frame when it comes to the incentives along with a cap amount. There are First Home Owner Grant that is applicable to first time home buyers in NSW that provides them with $10,000 to go towards purchasing a building.
Depending on when the transaction happens for the property there may be a cap to the amount e.g property that occurred in the transaction period of 1 July 2017 onwards had a cap on the purchase amount for $600,000 and $750,000 for construction in the NSW state.
3. You can get an exemption off stamp duty
Stamp duty is probably one of the biggest costs that first-time home buyers will have to face. Being able to get an exemption off this fee can be a breather for many first-time home owners who want to crack the property market without busting their finances.
Once again, the amount in which you will be exempted for will differ from state to state. For example, the First Home Buyers Assistance Scheme which commenced on July 2017 last year offered NSW homeowners a stamp duty exemption for a home valued up to $650,000, while states such as ACT offered exemptions for new or substantially renovated properties that were valued at less than $562,000.
4. You can also get incentives for purchases of vacant land
Thankfully, the incentives are not limited to first-time property buyers but it is also available for people who plan on purchasing vacant land in some states. It is vital that you check the government incentives that are available in your area and check what incentives are suitable for your situation. Keep in mind that there could be a cap on the amount. Therefore, if you are banking on the incentive to help you save some money you need to be aware of the amount that you spend.
5. It still pays to save for a deposit
The Australian government may be playing its part when it comes to offering a boost for first homeowners in the form of grants, but it still helps to save up for a deposit. A general rule of thumb is that your deposit should be anything between 10% - 20%, which will help reduce the amount that you need to borrow and can also prevent you from being slapped with a Lenders Mortgage Insurance (LMI) fee.