A new first-home buyer fund has been established as part of the State Government’s efforts to get the economy moving again after the Covid lockdown.
If you’re a first-home buyer right now, you will save thousands of dollars by navigating the bewildering number of offers that are available from the State and Federal governments.
The latest effort is a $500 million fund called HomesVic to help you break into the market. This follows the axing of stamp duty for first-home buyers who purchase a property for less than $600,000 and deep discounts if they bought for up to $750,000.
HomesVic is an addition to the First Homeowners Grant, which is capped at $10,000 if you buy in metro Melbourne and doubles in regional areas. In both cases, your purchase must be less than five years old to qualify.
The Federal Government has three separate schemes, all of which are worth checking out. The best-known program is the First Home Loan Deposit Scheme in which the taxpayer will cover your Lenders Mortgage Insurance.
It also offers a First Home Super Saver Scheme, in which you can save for a home using a beneficial tax structure that works similarly to superannuation.
The third is the $25,000 Homebuilder Grant, but that expires at the end of the year.
A $500 million HomesVic fund is available if you are eligible for a loan but are struggling to come up with the 20% deposit. (You should also note that not all lenders are currently demanding a 20% deposit, and the Federal Government is also easing the pain with its Lenders Mortgage Insurance grant.)
This new Victorian initiative is not as generous as it looks on the surface. You can only receive this funding if you yield equity of comparable value in your new home. In other words, the State Government will want its money back and is using your home as collateral.
Nevertheless, this is a welcome development as first-home buyers play a significant role in ensuring the overall health of the market.
As part of Victoria’s post-Covid initiative, stamp duty is to be reduced for all buyers of property valued at $1 million or less. This will have only a limited impact on first-time buyers who already have an existing discount on stamp duty.
With all these discounts, schemes and grants flying around, keeping a check on what’s available to a first-home buyer is becoming complicated.
Make sure you seek professional financial advice. This will ensure you maximise every opportunity designed to help you enter the market. And always speak with your lender, mortgage broker or a professional financial adviser before determining your spending limit and your capacity to service the loan.