First Home Owners – Some Helpful Tips.
Buying your first home can be an exciting time and is usually one of the largest transactions that you will be part of.
Once you have agreed on a price and are about to sign the dotted line on the contract of sale you should:
1. Carefully read the Contract of Sale of Real Estate and obtain legal advice. A solicitor with experience in property law can advise you if there are any issues which may affect the legal title to your property or any problems in the contract. Solicitors can also help guide you through the sale process and handle any issues that arise.
2. Review your funding options and choose the right financial package for your circumstances.
3.Work out whether you are entitled to a First Home Owner Grant, Bonus, Boost, Regional Bonus or reduction in stamp duty. These various entitlements are discussed below and will depend on when your contract is entered into and when it settles.
First Home Owners Grant
There have been recent changes to the First Home Owners Grant which took effect on contracts entered into on or after 1 July 2013.
If you entered a contract after 1 July 2013 to build or purchase a new home you may be eligible for up to $10,000 if you are a first home buyer. The Grant is an increase of $3,000 from the $7,000 which may be available to those who signed a contract between 1 January 2010 and 30 June 2013 for new or established homes. If you buy an established home after 1 July 2013 you will no longer be entitled to the Grant. Please note the purchase price of the property must not exceed $750,000 (except where it is primary production land).
Entitlements which no longer apply to new contracts
If you entered into a contract after 1 July 2012 then there is no longer an entitlement to the First Home Bonus or Regional Bonus and if the contract was entered into after 1 January 2010, the First Home Owner Boost is also no longer available.
Who can claim the stamp duty concessions which are being phased in?
Where the settlement date is after 1 July 2011 you may be entitled to the stamp duty concession for the purchase of a new or established home where it will be your principal place of residence and the purchase price does not exceed $600,000. The concession can be applied in conjunction with the Grant (if applicable).
In order to be eligible you must reside in the property for a continuous period of 12 months within the first year after settlement.
The stamp duty concession available is as follows:
- For a contract which settles after 1 July 2011 but before 31 December 2012- 20% reduction in duty
- For a contract which settles after 1 January 2013 but before 30 June 2013- 30% reduction in duty
- For a contract which settles after 1 July 2013 but before 31 August 2014- 40% reduction in duty
- For a contract which settles after 1 September 2014- 50% reduction in duty
Therefore if you enter into a contract next year with a long settlement date close to August 2014 it may be worthwhile to extend the settlement date to a date after 1 September 2014 if it means an additional 10% reduction in duty.
For more information please contact Phillip Leaman or a member of the Property Team.
