Navigating the world of first-time homebuying in 2023 can be overwhelming. With a plethora of confusing jargon and a range of incentives and grants available, it's essential to have a clear understanding of what Victorian and Melbourne First Home Buyers can access. In this comprehensive article, we will break down the concessions, incentives, and grants that are at your disposal.
Stamp Duty Concessions: Stamp duty, a significant expense when purchasing a property, can be lessened through concessions and exemptions. In Melbourne and Victoria, a stamp duty concession reduces the amount of stamp duty you need to pay, while a stamp duty exemption means you don't have to pay any stamp duty at all.
If the property you are buying is valued at $600,000 or less, you are exempt from paying stamp duty, resulting in potential savings of up to $31,070 based on a $600,000 property. This generous financial relief is provided by the state government to facilitate your first home purchase.
For properties valued between $600,001 and $750,000, stamp duty is calculated on a sliding scale. To determine the exact amount you would need to pay based on a property in this range, you can utilize our convenient calculator available on our website.
For a more in-depth analysis of stamp duty concessions, refer to our previous article.
First Home Owner Grant Victoria: Distinct from the stamp duty concession, the First Home Owner Grant is a monetary benefit provided by the government. If you purchase or build a new property in Melbourne or Victoria, you can receive $10,000. However, due to the introduction of the stamp duty concession, the First Home Owner Grant is exclusively available to those buying or building brand-new properties. Unfortunately, if you are purchasing an established property, you are not eligible for this grant.
To qualify for the $10,000 First Home Owner Grant in 2023, you must be purchasing a new property valued up to $750,000 that has never been lived in, or you must be building a new property within the same value range. Check your eligibility by answering a few questions on the State Revenue Office website.
First Home Guarantee: Formerly known as the First Home Loan Deposit Scheme, the First Home Guarantee is a Federal Government initiative designed to assist eligible first home buyers nationwide, including Victoria and Melbourne. Typically, a 20% deposit is required to purchase a home. However, the National Housing Finance and Investment Corporation (NHFIC) guarantees up to 15% of the deposit for eligible buyers, significantly reducing the required deposit to just 5%. The scheme has been expanded to accommodate an additional 35,000 borrowers per financial year across 27 different lenders for FY22/23. For detailed information, you can download the fact sheet from our website.
First Home Buyers Super Saver Scheme: The First Home Super Saver Scheme (FHSSS) allows you to save money in your superannuation fund, enabling you to accumulate savings faster than traditional saving methods due to the concessional tax treatment within your super fund. You can make extra contributions either before-tax (concessional) or after-tax (non-concessional) into your super fund. You are then able to withdraw up to $15,000 per year, with a total cap of $50,000 across all years. For couples, this means a combined savings limit of up to $100,000. It is strongly recommended that you consult with an accountant before engaging in the FHSSS, as there are complex rules and regulations to adhere to. Our team of experts can connect you with knowledgeable accountants who will guide you through the intricacies of the scheme.
Homebuyer Fund: Eligible home buyers can benefit from the Homebuyer Fund, a shared equity scheme in which the Victorian government contributes up to 25% of a property purchase. This scheme is not directly accessible through brokers, but we can provide you with the necessary contacts of participating lenders.
With the array of incentives available, first home buyers have ample opportunities to save and secure their dream homes. You may even be eligible to take advantage of multiple incentives simultaneously. At Wealth Effect Group we understand the significance of purchasing your first home and are committed to providing you with the knowledge and support necessary to make informed decisions. Feel free to reach out to us if you have any questions or require further assistance. We are here to guide you through the exciting journey of homeownership.