Securing your first home in the Australian property market is no mean feat, and there are very few who would envy a first home buyer in our current economic climate. However, the Australian Government has introduced a new assistance program that will help first home buyers make their first step on the property ladder. The newly introduced First Home Buyer Choice has been designed to reduce the time necessary to save for a deposit, as all individuals who meet the criteria for status as a first home buyer now have the ability to choose between paying a reduced rate of annual property tax or paying their stamp duty. 

By taking full advantage of this fantastic new initiative and also securing the best home loans available, you’ll be able to fast-track your way to property ownership. The team at Greenline Home Loans is committed to offering the best financial advice, and they have compiled this article to help you make the most of this new government scheme and enjoy the freedom of home ownership. 

So, What Does This All Mean?

The newly introduced First Home Buyer Scheme may sound daunting and complicated, but the main takeaway from it is that it works to reduce the upfront costs that you encounter when buying your first property, and helps you align your payments with your future plans. The initiative gives you the ability to choose between paying a reduced rate of annual property tax or paying the stamp duty due on your property. 

Annual Property Tax

Property tax is a fee that is payable to the government each year, and its calculation is based on the value of the land your property sits on. The rate of annual property tax differs between owner–occupied properties and investment properties, offering lower rates to those properties that are the residence of their owner. Should you choose to pay annual property tax, you will be subject to a rate of $400 plus 0.3% of the value of the land you are purchasing. As this tax is only levied each year and the overall amount paid in annual property tax is dependent upon the number of years the property will be owned, it’s advisable to choose this payment if you are looking to live in the property for a shorter period of time. 

Stamp Duty

Stamp duty is a lump sum payment that must be paid upfront when the property is purchased. These sums are calculated as a specified percentage of the purchase price for the property, and this percentage depends upon the property’s value. Naturally, more expensive properties are charged a higher percentage of stamp duty. In the past, the amount of money needed to purchase a first home has been calculated by combining the initial deposit payable on a property and the stamp duty that will be incurred. By giving a first home buyer the option to not make this payment, the Australian Government is effectively shortening the time it will take to save enough funds for the purchase of a home. As stamp duty is a one-time lump sum that significantly increases the initial costs of purchasing a property, it’s advisable to only select this payment if you intend to own the property for a particularly long time. 

Carefully consider your choice

How Can I Access This Scheme?

The First Home Buyer Choice scheme is set to launch on the 16th of January 2023 and will be eligible for properties that are purchased up to the value of $1.5 million. While all first home buyers will have the ability to choose between paying the reduced annual property tax rates or paying the stamp duty due, this choice is essentially only relevant to properties over the value of $650,000. This is because existing government assistance has waived stamp duty payments for first home buyers purchasing properties within this threshold, and consequently if you purchase a property for less than $650,000, you will not be expected to select the annual property tax.

This scheme is subject to the individual/s meeting a set of criteria qualifying them as a first home buyer. The criteria includes the following:

• you must be an individual (not a company or trust)
• you must be over 18 years old
• you, or at least one person you’re buying with, must be an Australian citizen or permanent resident
• you or your spouse must not have previously owned or co-owned residential property in Australia, nor received a First Home Buyer Grant or duty concessions
• the property you are buying must be worth less than or equal to $1.5 million
• you must move into the property within 12 months of purchase and live in it continuously for at least 6 months
• you must sign the contract of purchase on or after 11 November 2022.

Does This Impact My Access To Home Loans?

Fortunately, accessing this new form of government assistance does not prevent you from seeking out the best home loans available to you, and when you combine the most affordable home loans with this new financial assistance, first home ownership becomes a far more realistic prospect. Regardless of your needs and the current financial situation you find yourself in, you can rely on the expert team at Greenline Home Loans to find the best home loans available that meet your requirements. 

We have a team of skilled mortgage brokers that have vast experience in offering financial advice to many different first home buyers, and with more a panel of 50 lenders, we can open the door to a plethora of different mortgage options. We pride ourselves on securing the best home loans that meet the needs of our clients, and we’re committed to offering personalised financial advice to help you throughout the process of securing your first home. As a first home buyer, it can be daunting to take your first steps into the property market, but when you secure the services of our team, we make sure you never tackle any financial decisions alone, and we’re always available to answer any questions you may have. 

Access the best home loans

Reach out to Greenline Home Loans today!

Regardless of whether you’re searching for your first home or an investment property, require additional information on how to secure the best home loans, or you’re a first home buyer in need of expert and personalised expert advice, don’t hesitate to contact the team of devoted brokers at Greenline Home Loans. With access to the services of 50 different lenders and a strong relationship with many major banks, we can always assist you and offer a customised financial solution that meets your requirements.At Greenline Home Loans, we tailor our services to ensure you have access to home loans that suit your circumstances and vision for the future, and we can guide you through the entire process from the first day you consider purchasing your first home. Reach out to our friendly team of brokers to speak about low-rate home loans on 1800 705 505 to get started today!