New Initiatives for First Home Buyers (VIC)
In an effort to address housing affordability, and potentially the political pressure around this topic at the moment; the Victorian State Government has drafted some new initiatives to help first home buyers get into the marketplace.
Let’s have a look at what they are: If you’re buying a property up to the value of $600,000, you will no longer pay stamp duty. If you’re buying a property between $600,000 and $750,000, you will pay a reduced stamp duty on a sliding scale.
Now, these initiatives kick in on 1st July 2017.
In addition to that, first homeowner’s grants in regional Victoria will increase from $10,000 to $20,000 for new builds only. Now that’s not a bad idea to stimulate construction and people thinking that moving to regional Victoria, given the housing affordability issues we currently have.
In addition to that, they’ve also done what, I think, is the best part of this policy announcement. And that is shared equity. So what we’re talking about here is helping 400 low-income earners, who may be struggling to save for a deposit while also paying rent, when getting into the property market. The government is going to buy up to 25% of the value of that property with the first home buyer buying the remaining portion. And then over time potentially buying the government out. Now I think that that’s a terrific incentive to help those low-income earners.
Now if you’d like to learn more about these initiatives, you can download the fact sheet that’s attached to this video (Find out more on the Changes to the FHOG and Stamp Duty here). Also, a lot of mortgage brokers will be able to help you with the application piece around making sure that these stamp duty concessions are included in the settlement of the property. Or also if you’re eligible for a first home owner’s grant, that paperwork is also submitted on behalf of you when you work with a mortgage broker.
Now, on the whole, I really do like some of these incentives if you take the long-term view. There has been some commentary around whether they are going to push property prices up automatically, and certainly, when you’re bringing in more demand into a marketplace that already has excess demand, that might be the case. But I also start to think, well longer term, as the value of those properties grows over time, because property is a long term play, those people who have got into the market as first home owners are going to be thankful that they did get into the market over time. So, if you’re thinking about getting into the market as a first home buyer, look at these incentives and ask yourself, am I just getting into the market because of them? I wouldn’t do that. But if you’re ready to settle down, ready to own a property, ready to have the responsibility of having a long term mortgage, then now might be the time to act. Thanks for watching.