One major takeaway from the Australian Federal 2021/22 budget is that the time to buy first-home buyers and single parents is nigh.
The extension to the First Home Loan Deposit Scheme, the increases in the First Home Buyer Super Saver Scheme, and the addition of the Family Home Guarantee, amongst other programs, will ensure that low to middle-income earners and single parents opportunities to own property on the market.
Gold Coast first-home buyers should be aware of the following programs, including recent updates to the programs announced in the federal 2021/22 budget:
- First Home Super Saver Scheme
- Family Home Guarantee
- Stamp Duty Concession
- Queensland’s First Home Owner Grant
It is also important to note that first-home buyers can apply for First Home Super Saver Scheme, Stamp Duty Concession, and the First Home Owner Grant alongside either the First Home Loan Deposit Scheme (FHLDS), the FHLDS (New Home Guarantee), or the Family Home Guarantee. However, eligibility for the schemes will differ.
First Home Super Saver Scheme (FHSSS)
The First Home Super Saver Scheme (FHSSS) is a government initiative intended to help first-time home buyers grow their deposits more quickly by allowing access to their super contributions. The Scheme also potentially reduces the tax you pay due to tax benefits through your super.
Moreover, an extension of the FHSSS announced at the 2021/22 Federal budget increases the First Home Buyer Super Saver Scheme to a maximum of $50,000, up from $30,000, which can be withdrawn from superannuation towards a house deposit. The increase comes into effect on July 1, 2022.
How does it work?
First home buyers, under the FSSSS, must have made voluntary super up to the maximum $15,000 per financial year into their super and can withdraw these amounts to help with a deposit for a first time home –additionally with associated earnings / less tax.
The maximum amount you can voluntarily contribute each year to your super account under the FHSSS is $15,000, with the total amount you can save and withdraw now increased to $50,000. First-home buyers should also be aware of the annual super contributions caps in place under the FHSSS
There are two options for voluntary concession contributions:
- Salary sacrifice contributions when upon your agreement, your employer pays some of your before-tax income into your super.
- Personal deductible contributions (PDCs) are where you voluntarily contribute your after-tax dollars into your super and then claim a tax deduction of these payments (i.e. transferring funds from your bank account into your super).
Compulsory contributions paid by your employer into your superfund before-tax contributions cannot be withdrawn using the Scheme.
First-home buyers under the Scheme must also abide by the following conditions:
- You must buy residential premises, including an existing or new house, townhouse, off-the-plan (house, apartment, or townhouse), land, including a house and land package land, and separate contract to build a home and excludes houseboats or motor homes.
- You need to purchase a residential home or land within 12 months of the super withdrawal. Extensions are available for up to 24 months granted by the Australian Taxation Office (ATO).
- Any FHSSS amounts that are subsequently not used for the direct property purchase must be restored into your super fund as after-tax contributions. Penalties apply;
- Within the first 12-months, the first home buyer must occupy the property for at least six months.
Who is eligible for the Scheme?
The eligibility criteria include:
- First home buyer aged 18 or over
- Australian Citizen
- Australians who have made voluntary super contributions made since July 1, 2017, of up to $15,000 per financial year
How do I withdraw Super contributions under FHSSS for a deposit?
All applications under the FHSSS must be made to the ATO and can only be drawn once in their lifetime.
Superannuation Guarantee contributions (those made by your employer) and spouse contributions (those that your partner may choose to place in your super fund) are not available for withdrawal.
Additional rules may apply, so visit the ATO website for more information.
HOTELESQUE PRIVILEGES!
Family Home Guarantee
The newly introduced Family Home Guarantee (FHG) is an Australian Government initiative that can help Gold Coast single parents with dependants to enter or re-enter the property market sooner.
Unlike the First Home Loan Deposit Scheme (FHLDS), the Family Home Guarantee can be used to purchase a new or existing home regardless if they are a previous owner-occupier or first-time homeowner.
On behalf of the Australian Government, the National Housing Finance and Investment Corporation (NHFIC) is allocating 10 000 Family Home Guarantees made available towards home ownership from July 1, 2021, to eligible single parents with dependents.
How does it work?
The newly introduced Family Home Guarantee (FHG) is an Australian Government initiative that can help Gold Coast single parents with dependants to enter or re-enter the property market sooner.
Unlike the First Home Loan Deposit Scheme (FHLDS), the Family Home Guarantee can be used to purchase a new or existing home regardless if they are a previous owner-occupier or first-time homeowner.
On behalf of the Australian Government, the National Housing Finance and Investment Corporation (NHFIC) is allocating 10 000 Family Home Guarantees made available towards home ownership from July 1, 2021, to eligible single parents with dependents.
Who is eligible for the Family Home Guarantee?
Applicants must meet the eligibility criteria at the entry time of the loan agreement. The eligibility criteria include:
- Australian citizens above the age of 18 years of age (Permanent residents are ineligible);
- Must be a single parent with at least one dependent and can legally demonstrate they are the natural or adoptive parent of the dependent.
- The single parent’s taxable income cannot exceed $125,000 per annum for the previous financial year and excludes child support as earned income.
- Single parents must have a minimum of 2% (and under the maximum of 20%) of the property’s value available as a deposit.
- Must be an intended owner-occupier of the purchased property, except if the applicant is an active Australian Defence Force member.
- Single parents must not currently own a home at the time of the loan, including a company title interest in land or a lease of land in Australia.
- Only the single parent’s name can be listed on the loan and the certificate of title; however, depending on shared custody arrangements, both parents may be eligible for the Scheme;
- The purchased property or land cannot be used as an investment property.
What types of properties are eligible?
All eligible properties under the Family Home Guarantee must be residential and are consistent with the First Home Loan Deposit Scheme. Suitable residential properties generally include:
- an existing freestanding house, townhouse or apartment
- a house and land package
- an off-the-plan dwelling (apartment or townhouse)
- land and separate contract to build a home
What are the property price thresholds for the Family Home Guarantee?
Source: The National Housing Finances and Investment Corporation (NHFIC)
How do I apply for the Family Home Guarantee?
Eligible single parents with dependents can apply for a loan to build a new home or buy an existing dwelling through a participating lender in the First Home Loan Deposit Scheme (FHLDS).
Please be advised that The National Housing Finances and Investment Corporation (NHFIC) does not take direct applications.
While there are no costs or repayments associated with the guarantee, single parents must meet all costs and repayments, including interest rates, for the home loan connected with the guarantee.
INVEST IN THE GOLD COAST
First Home Concession
The Queensland Government grant allows you to claim a first home concession for transfer duty for your first residence, granted the first home buyer meets eligibility criteria.
The First Home Concession only applies to a property valued under $550,000, potentially savings of up to $15,925. The First Home Concession may still apply for a home valued over $550,000, but you should seek guidance via the Queensland Government website.
Unlike other federal schemes, Australian citizens and permanent resident can claim stamp duty concession, providing they also meet all other eligibility criteria.
Who is eligible for the First Home Concession?
To be eligible for a first home concession, you must:
- be buying or building a home;
- have never claimed the QLD’s first home vacant land concession;
- have no interest in another residence in Australia or overseas, including past interests;
- be at least 18 years of age (exceptions are available, see the Queensland website for more details);
- move into the property within one year of settlement (time extensions are not available);
- not dispose of the full or part of the property (sell, transfer, lease or make substantial renovations) before inhabiting the residence; this includes demolishing a home and constructing a new home in the first year.
- have previous tenants or owners vacate within six months of settlement of your purchased property;
- pay market value for residential properties valued between $500,001 and $549,999.
How to claim your Queensland First Home Buyers Stamp Duty Concession
In consultation with your solicitor or conveyancer, you will complete the forms and lodge them for stamping. You will also need to include your contract and valuation if required.
You can also claim later after you have paid the total stamp duty rate if you’re unsure that you meet the concession requirements. You simply need to lodge the forms with the Queensland government with the help of a solicitor or mortgage broker. All the eligibility requirements still apply.
First Home Owner Grant
The Queensland First Home Owners’ Grant is a state government initiative helping first-home owners to get their first and own home sooner.
If your contract is dated July 1 2018, or later, you can apply for a $15,000 Queensland grant to be used for purchasing or construction of your new house, townhouse, unit or apartment valued at less than $750,000.
Who is eligible for the grant?
- You must be an Australian citizen or permanent resident;
- You must be 18 years of age or over;
- Neither you nor your spouse has previously owned and resided in the same property in Australia;
- You must purchase or build a new home;
- The value of the property (including the land) is less than $750,000;
- You must intend to inhabit the new home as your principal place of residence within one year of the final transaction and living there continuously for six months.
How does it work?
If your contract is dated July 1 2018, or later, you can apply for a $15,000 Queensland grant to be used for purchasing or construction of your new property, townhouse, unit or apartment valued at less than $750,000.
You can choose to buy off the plan or decide to build yourself.
Grant approval is dependent on how and when you apply and your choice to build or buy. For this reason, the Queenslanders are advised not solely to commit to using the grant as a deposit.
Grant applications do not rely on having a deposit.
What types of properties are eligible, and the timeline?
The First Home Owner Grant allows for various properties:
- a brand new home, including house, townhouse or apartment
- a house and land package
- an off-the-plan apartment, house or townhouse
- land and separate contract to build a home
- a land and owner-to-build
The application timeline for each property varies. Those first-time buyers buying a new house must apply within one year of taking procession of the new home.
Contracts to build, including off-the-plan, land and package, land and separate agreement and owner-builder must apply within 1-year of the new home’s completion (date of the final inspection certificate).
Extensions are available but limited.
How to apply for the Queensland First Home Buyers Grant
There are two submission options for the grant:
- Approved Bank or Lending Institution
- Office of State Revenue
Banks and Lending Institutes
Applying through an approved agent (i.e. bank or lender organisation) can get you the funds for settlement more quickly.
Agents will require an application form and all supporting documentation (including the signed and dated contract to buy or build) for the grant.
Agents then assess your eligibility and handle your application.
The Office of State Revenue
Applications through the Office of State Revenue Grants are either through post or email and will take longer to receive confirmation. Applications generally take about ten working days to submit all necessary documentation but are subject to delay due to large application numbers at the time of your processing.
Processing agents may contact you for any further information and to confirm your eligibility for the grant.
You will not receive the grant until your supply the Office of State Revenue with the final inspection certificate for new builds and the housing contracts for existing home purchases.
Additional Resources For First Home Buyers
For additional information and resources, please view the below links released by the NHFIC, ATO and Queensland Government for the first-home buyers:
- FHLDS Scheme Information Guide
- First Home Loan Deposit Scheme FACT SHEET – 2020-2021
- FHLDS (New Homes) Guide
- Australian Government Federal Budget
- ATO First Home Super Saver Scheme
- Family Home Guarantee Fact Sheet
- Queensland Government First Home Concession
- Queensland Government – Applying For Your First Home Owner Grant
- Eligibility Tester For The First Home Owner Grant