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First Home Owner Update – What’s changing on July 1

First Home Owner Update – What’s changing on July 1

May 9, 2023 | First Home Buyers, Government Grants

First Home Owner Update – What’s Changing on July 1

From July 1, 2023, the New South Wales Australian Labor Party (ALP) will implement changes that will impact the way many first home owners purchase property. To make the transition easier, we’re going to run you through some of these changes and how they could impact you.

Stamp Duty Concessions

The ALP will introduce changes to stamp duty for first home buyers. Currently, first home buyers are exempt from paying stamp duty on properties valued up to $650,000, and receive a concession on properties valued between $650,000 and $800,000.

From July 1, 2023, these thresholds will be increased to $800,000 and $1 million respectively, providing even more support for those looking to purchase their first home.

Changes to the First Home Owner Grant

On July 1, the First Home Owner Grant will be increased from $10,000 to $25,000 for eligible first home buyers purchasing a newly constructed home or an off-the-plan property. This grant will be available for properties valued up to $1 million, and will provide a significant boost to those trying to get into the property market.

Removal of  the Home Buyers Buyer Choice Scheme

Under the newly elected Minns Labor Government, the NSW Government will now abolish the First Home Buyer Choice scheme, reverting to the new stamp duty concessions as mentioned above.

Over 4,200 First Home Buyers had selected the First Home Buyer Choice options since it was rolled out in November 2022.

For those First Home Buyers who had already selected the property tax option there will be a grace period and it would be unlikely that the new NSW government would reverse any existing arrangements. We will continue to monitor this and keep you updated.

First Home Guarantee Eligibility to Expand

Previously, the First Home Guarantee and Regional First Home Guarantee Schemes were restricted to married and single people, as well as those in defacto relationship who were also Australian citizens at the time of application.

From July 1 this year, the Home Guarantee Scheme will expand, allowing permanent residents to access the scheme as well as allowing friends, siblings and other family members to jointly apply for the guarantees. These schemes will also be available to non-first home buyers who have not owned a property in the past 10 years.

For both of these schemes, the federal government acts as a guarantor on up to 15% of the loan. This enables eligible buyers to purchase a home with as little as a 5 percent deposit, eliminating the need for lender’s mortgage insurance.

Family Home Guarantee Changes

The criteria for Family Home Guarantee applications will also be expanded beyond just single natural or adoptive parents with dependents. This means that the guarantee will be available to eligible borrowers who are single legal guardians of children, such as aunts, uncles and grandparents.

Under the Family Home Guarantee, the federal government acts as a guarantor on up to 18% of the loan. This enables eligible buyers to purchase a home with as little as a 2 percent deposit, eliminating the need for lender’s mortgage insurance.

The availability of this guarantee will also expand to include permanent residents in addition to Australian citizens.

How do I know if I’m eligible?

Our team will help you identify which Guarantees could be applicable to you under the Home Guarantee Scheme (HGS)

We’ll help you find the right path to owning your own home and will be with you every step of the way. To get started, simply get in touch to organise a call or meeting.

Construction costs continue to soar at record rates

Construction costs continue to soar at record rates

Nov 1, 2022 | Construction Loan


Building your own home certainly sounds like a dream. From the floor plan to the flooring, every detail can be customised to your tastes – but this dream has become a nightmare for many Aussies building or looking to build in the current market.

CoreLogic’s Cordell Construction Cost Index (CCI) for Q3 2022 showed that national residential construction costs have increased at a record rate in the year to September 2022, recording the highest annual growth rate (excluding the period impacted by the introduction of GST).

Cost have increased by 11% over the 12 months to September 2022. The quarterly figure was also higher at 4.7%, compared to 2.4% in the previous quarter. This was above the 3.8% surge recorded over the three months to September 2021 when COVID lockdowns were having a more significant impact on domestic supply chains.

Unfortunately for Australians looking to build, the cost is only expected to rise further, with CoreLogic’s Construction Cost Estimation Manager, John Bennett, commenting that the team are continuing to see price increases, particularly across timber and metal materials.

With building materials increasing in price, many suppliers have little choice but to pass on price increases. John also commented that this quarter has also shown a larger increase in materials that were previously stable, such as wall linings including plasterboard and fibre cement. Even your front door will now cost you more with sharp price rises.

Whilst sea freight prices have begun to stabilise, the increasing cost of raw materials, labour and fuel continues to place upward pressure on residential construction costs.

So what is the outlook? Mr Lawless said that ongoing labour shortages and supply issues meant that these conditions would likely remaining challenging with little reprieve expected in the short to medium-term. “There’s no quick solution for providing additional materials and fuel costs remain elevated. All of these factors have an impact and are likely to push building costs higher for some time yet.”

Thinking about building or reconsidering your options?

We’re here to help. Whether you have your heart set on building or renovating or are unsure of what to do next, our team is here to help. We’ll sit down together to look at your options and come up with a plan that’s right for you. Contact us today to find out more.

What is a family guarantee and how can it help you secure your home?

What is a family guarantee and how can it help you secure your home?

Sep 1, 2022 | First Home Buyers, Investment Property, Purchase

It’s no secret that saving for a home deposit can be difficult. Whether you’re juggling the

cost of renting, further education or even just the rising cost of living, the dream of owning
a home can feel like a long shot – but there is something that could help you secure that
dream sooner.

A family security guarantee is commonly used by home buyers when they aren’t able to
secure a loan on their own.

What is a family security guarantee?

For borrowers who aren’t able to reach a deposit (as required by the lender) on their home
loan, a Family Security Guarantee may be a solution.

This allows a family member to act as a guarantor to secure your deposit, giving you greater
borrowing power. This can reduce your Loan to Value Ratio (LVR) to under 80%, removing
the need to pay Lender’s Mortgage Insurance (LMI) on top of your deposit.

That family member can choose to use equity from their home or cash (for example, savings
or term deposit funds) to use as security for your loan, however, they will not need to give
any funds directly to you or the lender.

What are the benefits of a Family Guarantee/Guarantor?

  • Borrowers can finance up to 100% of the purchase price, plus costs
  • Lender’s Mortgage Insurance and Low Deposit Premiums can be avoided
  • Wider range of loan products to choose from
  • Additional interest rate discounts available
  • You may be able to enter the market sooner than you would be able to otherwise
    What does this kind of loan look like?

Here is a quick example of how a Family Guarantee can work:

Jane is looking to purchase a property valued at $500,000. To do this, she needs to borrow
$450,000 to cover the loan abouts and other costs (not including LMI).

Loan Amount ÷ Property Value = LVR

$450,000 ÷ $500,000 x 100 = 90%

With an LVR of 90%, Jane would need to pay LMI as an added cost, however, if she adds a
Family Security Guarantee of $70,000 as additional security, the LVR on the loan reduces

Loan Amount ÷ (Property Value + Security Guarantee amount) = LVR

$450,000 ÷ ($500,000 + $70,000) x 100 = 79%

With a new LVR of 79%, Jane no longer requires LMI, saving her a significant amount of
money on her property purchase.

The details:

  • The value ($) of the guarantee can be limited to 20% of the purchase price, plus costs
    (including stamp duty, legal fees etc).
  • In most cases there are no servicing requirements from the Guarantor/s (this is not
    an income guarantee)
  • A second mortgage may be available if the guarantor’s current mortgage is with a
    different lender

How long does the guarantee last?

You can remove the guarantee when:

  • You haven’t missed any payments in the last 6 months
  • Your loan is less than 80% of the property value (you can still remove the guarantee
    if you owe more than this, however, you will need to pay LMI to achieve this)
    Most guarantees last from 2-5 years, depending on property prices and your ability to pay
    down your loan.

Want to see if this is suitable for you?

Get in touch with our team today to discuss your options. Send us an email or call us on (02)
9095 6888

Stamp Duty Choice: Which is the better way to pay?

Stamp Duty Choice: Which is the better way to pay?

Jul 4, 2022 | Uncategorized

New South Wales Premier, Dominic Perrottet has revealed that the state will be giving eligible first home buyersd the option of paying stamp duty upfront or an annual property tax (based on the ‘dutiable value’ of the property) from January 16th 2023, but which choice is the right choice?

The answer really depends on your circumstances – and your property may not even be eligible.

This property tax option will be available for properties valued up to $1.5 million. To be eligible, you must move into the property within 12 months of purchase and live in it continuously for a minimum of 6 months.

Under the new scheme, first home buyers who opt for the property tax will pay an annual property tax plus a percentage of the land value of the property.

What will the property tax rates be?

The property tax rates for 2022-23 will be:

  • $400 plus 0.3 percent of land value for properties whose owners live in them;
  • $1,500 plus 1.1 percent of land value for investment properties

These rates will be indexed each year and will rise in line with average incomes.

A property tax calculator will be available after the enactment of legislation and before January 16th 2023 when buyers can opt-in to property tax.

What about first home buyer exemptions?

First home buyers will continue to be eligible to apply for full stamp duty exemption for properties up to $650,000, with concessions also remaining in place for properties between $650,000 and $800,000.

How do the options compare?

Let’s run through an example.

First home purchase: $1,200,000

Stamp duty on purchase: $50,875

2022-23 property tax: $2,560 – Based on Assessable Duty of $750,000 (ie. land value)

With half of all owner-occupier selling their property within 10 years, not paying stamp duty would help to lower the up-front costs of purchasing a property, however, for an owner who is planning on staying in their property long term, a once-off stamp duty purchase may be a better option – and there would be no need to budget for that yearly repayment.

What is the purpose of the stamp duty scheme?

This new scheme is part of a multi-billion dollar housing package that was announced in the 2022-23 NSW budget, aiming to deliver “quality, accessible and affordable housing” across the state.

The Premier hopes that the option of stamp duty or annual tax would help a broader group to become first home buyers, suggesting that stamp duty adds about two years to the time required to save the up-front costs of the median NSW dwelling (based on  a NSW household with the median income saving 15 per cent of their income).

Looking to purchase your first home?

Get in touch with us to make sure you have everything sorted before heading to that first open home. From purchase prices to pre-approval, we’re here to help make the purchasing process as smooth as possible.

Apartments vs Houses: What should you invest in?

Apartments vs Houses: What should you invest in?

Mar 3, 2022 | Investment Property, Purchase

You’ve decided you’re ready to invest – but the decision process doesn’t stop there.

Houses, units, apartments, townhouses, new builds, existing builds – where should you put your money?

Purchasing any property is a highly considered process. In previous years, houses were considered the best purchase, with apartments and units only really an option for those on a lower budget.

Today, however, this is a thing of the past as the Australian property market continues to thrive, attracting overseas investors, infrastructure evolution and changing living situations.

So what should you invest in?

Deciding whether an apartment or house is the right purchase for you all depends on your budget, strategic goals and the current market.

With any major financial purchase, it’s important to look beyond your personal preference to the overall environment. You need to set your feelings aside and look at the property purchase as a rational financial transaction to ensure you’re spending your money wisely.

By focusing on economic indicators such as auction clearance rates, interest rates and median purchase prices, you can develop a solid strategic plan.

But you shouldn’t do it alone. Seeking professional assistance from real estate agents, mortgage brokers and financial planners is critical as it allows you to properly evaluate this information and apply it to your goals.

What is the best type of property to invest in?

When considering investment opportunities, it’s important to look at the facts. There are three important indicators that need to be considered before purchasing an apartment or house:

  • Economic Factors – understanding key economic drivers such as cash and interest rates, clearance and vacancy rates, demographics and employment figures will help illustrate how the market is currently performing, as well as give you an idea of what may happen in the future.
  • Supply and Demand – how many apartments are on the market currently compared to the number of houses? Which are leasing faster? Are house prices increasing faster than apartments or vice versa? By understanding these factors, as well as any developments in the area, you are able to determine whether there is an oversupply or undersupply in a particular location.
  • Affordability – understanding the affordability of a property will ensure you are not over or under-capitalising on your purchase. Rental yield is also an important factor to consider for the affordability of prospective tenants.

What are the advantages of investing in an apartment?

  • Generally a cheaper purchase price
  • Often located in highly sought-after inner city or beachside locations
  • Strata maintenance assists in the upkeep and maintenance of your property
  • Higher levels of rent relative to the purchase price provides investors with a better yield
  • When investing in apartments, you’re often able to hold more property over the long term due to lower purchase and maintenance costs

What are the advantages of purchasing a house as an investment property?

  • More privacy for tenants – often attracting higher rental prices
  • More scope for renovations when looking to add value quickly, without the need for signoff from strata or body corporate
  • Ownership of appreciating land
  • Can be more resilient to market changes

What are the disadvantages of purchasing an apartment as an investment property?

  • Restrictions on pet ownership can turn away tenants
  • Upgrades and renovations can be restricted
  • Less privacy for tenants
  • Fewer facilities including pools, backyards and outdoor areas

What are the disadvantages of investing in a home?

  • Higher purchase prices
  • Maintenance of grounds including gardens and pools
  • No strata or body corporate to assist with building maintenance or compliance

What type of property is the best to invest in?

Ultimately, there is no clear winner when deciding between houses or apartments. Instead, the key is to assess each opportunity on a case-by-case basis, determining which is the right purchase for you.

Need help deciding? That’s where we come in. To find out more about whether an apartment or home is the right investment for you, contact our team on (02) 9095 6888 or [email protected]