Look for help to get into the housing market

Governments across the country are offering incentives for first-home buyers. You just have to know where to look.

Buying your own home is the largest purchase most people will make in their lives.

However, a long run of low interest rates has fuelled spectacular dwelling price growth, record housing debt and phenomenal asset values, particularly in Sydney and Melbourne. According to the Reserve Bank of Australia, housing prices nationally have increased 7.25 per cent a year, on average, over the past 30 years.

In its Perceptions of Housing Affordability Report 2017, financial analysis and advisory firm CoreLogic says it now takes 1.5 years of household income to save for a 20 per cent deposit on a dwelling compared with 0.8 years 15 years ago.

Nevertheless, there are government incentives to help prospective first-home buyers. Last year’s Federal Budget proposed allowing individuals to make voluntary contributions to their superannuation to save for a deposit.

Super contributions and earnings are taxed at 15%, rather than higher marginal rates. Contributions are limited to $30,000 per person in total and $15,000 per year and both members of a couple could take advantage of the scheme.

Currently, the NSW and Victorian governments are offer first-home buyers:

  • no stamp duty on all homes worth up to $650,000 in NSW and $600,000 in Victoria
  • stamp duty relief for homes worth up to $800,000 in NSW and $750,000 in Victoria
  • a $10,000 grant for builders of new homes worth up to $750,000 and purchasers of new homes worth up to $600,000 in NSW
  • no duty on lenders mortgage insurance in NSW

Most states have first-home buyer grants, and some are making it harder for foreign investors by increasing duties and land taxes and introducing other measures to reduce competition for first-home buyers.

SEEK ADVICE

There are many investment options that can help you build a deposit, but you don’t have to make financial decisions by yourself.

Chat with your Adviser today… or I’m more than happy to help!

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