FIRST HOME BUYERS ARE SEIZING THE OPPORTUNITY TO ENTER THE PROPERTY MARKET IN 2023 THANKS TO A SLOWING PROPERTY MARKET AND THE RAFT OF GOVERNMENT BENEFITS ON OFFER.

Words Aaron Christie-David, Atelier Wealth

What benefits am I eligible for?

Let’s have a look at the incentives on offer:

1. First Home Buyers Choice (FHBC) scheme

2. First Home Buyers Assistance Scheme

3. First Home Guarantee (FHG) scheme

4. First Home Owner Grant (New Home)

5. Shared Equity Scheme

6. Regional First Home Buyer Guarantee (RFHBG)

The most significant change for First Home Buyers is the eligible purchase price limit has been raised to $1,500,000 which is great news considering the recent price growth in the Illawarra. This change means you can elect to pay Stamp Duty upfront or opt to pay an Annual Property Tax.

What’s the difference between Stamp Duty and an Annual Land Tax?

Stamp Duty is a one-off payment, calculated as a percentage of your purchase price. This usually means you’ve had to use part of your savings towards land tax which has limited how much deposit you have. Annual Property Tax payments are based on the land value of the purchased property. The property tax rates for 2022-2023 and 2023-2024 will be:

• $400 plus 0.3% of land value of your first home; or 

• $1,500 plus 1.1% of land value for your investment property

If you are unsure about which option to choose, some considerations are:

• How long do you think you would be living in this home?

• Would you consider turning this into an investment property after you move out?

• How much deposit do you currently have and how much can you purchase for?

How do I work out my eligibility?

For all the First Home Owner incentives on offer there are eligibility criteria you need to meet and these will vary across the different schemes, which include:

• Purchase price

• Income limits: based on being a single or couple there is some restrictions around how much you earn to qualify

• Is the property vacant land, brand new or an existing home?

• How much deposit do you have: some options allow for a 2-5% deposit and not incurring Lenders Mortgage Insurance (LMI)

• Location: across the Illawarra region you may qualify for the Regional First Home Buyer Guarantee (RFHBG)

• Age: you need to be a minimum of 18 years old and there are some options for singles over 50

• Occupations: nurses, teachers or police have access to new schemes

• Open to Australian citizens

• You or your partner cannot have previously purchased a property.