A break down guide for first homebuyers

If you are yet to make a move to secure your own Perth apartment, here’s what is currently on offer for first-time buyers by way of government incentives following the 2021 Federal Budget.

Firstly, the State Government’s First Home Owner Grant (FHOG) currently offers $10,000 to first homeowners who purchase an apartment. This grant is capped to properties with a total value, including land, of $750,000 or less. If the home is located north of the 26th parallel, the cap increases to $1 million or less.

The FHOG is a once-only grant, which is payable per eligible property transaction (for example, two people purchasing an apartment together are only entitled to receive one grant), to encourage and assist first homebuyers to buy or build a new residential property for use as their principal place of residence.

The second piece of good news for first-time buyers is that units under $430,000 are completely exempt from stamp duty, and a reduced rate applies for properties of up to $530,000 for house and land.

Like the FHOG, this waiver or reduction in stamp duty is on the condition that the home and/or land purchased is used as the primary place of residence.

Thirdly, the Federal Budget introduced several new initiatives specifically for first homebuyers struggling to afford the required 20 per cent deposits:

The First Home Loan Deposit Scheme (FHLDS) supports buyers with deposits under 20 per cent (up to five per cent) to purchase property without having to pay lenders mortgage insurance. The Federal Government acts as a guarantor in this circumstance.

Key conditions for FHLDS includes income caps of $125,000 per annum ($200,000 for couples), with enrolment into the FHLDS capped at 10,000 per financial year.

The First Home Super Saver Scheme allows eligible buyers to make extra contributions into their superannuation fund for a deposit. Previously, first-time buyers could withdraw up to $30,000, however the latest Federal Budget has revealed the scheme will be increased to $50,000 from July 1, 2022.

As interest rates are at a historic low across savings accounts and term deposits, using your superannuation fund to try and take advantage of higher rates of return may prove to be a faster option than waiting for your deposit to accumulate in a saver account.

Lastly, the 2021 Federal Budget has a new initiative specifically tailored to single parents struggling to get a foot on the property ladder. The Family Home Guarantee is available for single parents with an income cap of $125,000, helping applicants with deposits as small as two per cent meet eligibility criteria to qualify for a home loan. The guarantee is available from July 1, 2021, with only 10,000 places available over the next four years.

With incentives like these, it’s no surprise that unit purchase growth outpaced house sales during the March quarter, with unit sellers celebrating a 58 per cent jump compared to the number sold in the same period last year.

Between Western Australia’s FHOG and stamp duty concession, the Federal Government’s new schemes and Australia’s record-low interest rates, first-time buyers have a lot to smile about with reasons aplenty to invest in their own apartment.