First Home Owners' Grant boosted in Queensland

First Home Owners' Grant boosted in Queensland

$1.8 billion dollars from the 2017-18 Queensland budget will be injected into the Queensland Housing Strategy over the next ten years. 

The Palaszczuk Government delivered their budget yesterday, with a big-spending focus on “creating jobs, strengthening communities and building a better future for all Queenslanders.” 

The Queensland Housing Strategy is a long-term plan, and the biggest commitment to housing in Queensland’s recent history, according to the government. 

They plan to invest the $1.8 billion as follows:

  • $1.2 billion to renew the existing social housing property portfolio
  • $420 million for a housing construction program to boost the supply of social and affordable housing (including $3.5 million to construct two refuges for women and children escaping domestic and family violence)
  • $75 million to progress home ownership in discrete Aboriginal and Torres Strait Islander communities
  • $100 million for reforms to the housing and homelessness service system

 The Queensland government are also extending the First Home Owners’ Grant. They will be providing additional funding of $30 million to extend the temporary increase from $15,000 to $20,000 for a further six months. 

The increased grant will be extended to eligible transactions entered into from 1 July 2017 to 31 December 2017, for buying or building new houses, units or townhouses valued at less than $750,000. 

The boost has been quite popular in Queensland, with 6,353 applications worth $127.1 million received as at 31 May 2017.

However, not everyone is happy with the Budget. The Real Estate Institute Queensland (REIQ) have released a statement expressing their disappointment over several features including a refusal “to broaden the grant to include established homes in regional Queensland.” 

The 2017-18 Budget does include $10 million for regional planning and program implementation. This will support a land supply monitoring program, and a strategic assessment of Queensland’s planning and environmental offsets framework for growth areas in South East Queensland. 

REIQ CEO Antonia Mercorella, however, was not convinced, stating that “additional supply in regional Queensland is going to further slow these markets and make any price recovery much longer to come into effect.” 

The REIQ was also disappointed this Government has chosen to ignore advice from a range of experts on abolishing stamp duty

What is stamp duty?

Stamp duty, also known as transfer duty, is a government imposed tax which applies to certain document and transaction exchanges, such as the sale of cars, business assets and property. In the case of purchasing property, it is usually the property buyer who will pay the determined stamp duty amount

Stamp duty is an onerous fiscal burden that stifles housing mobility and many experts are in agreement, including the Henry Tax Review, that stamp duty should be replaced,” Ms Mercorella said. 

“When the cost of selling your house comes with an additional price tag of tens of thousands of dollars, it gives many people pause.”

“Empty nesters wait longer to downsize and young families wait longer to upsize and this creates inefficiencies in the housing market that are undesirable,” Ms Mercorella said.

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How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).

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What is stamp duty?

Stamp duty is the tax that must be paid when purchasing a property in Australia.

It is calculated by the state government based on the selling price of the property. These charges may differ for first homebuyers. You can calculate the stamp duty for your property using our stamp duty calculator.

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What fees are there when buying a house?

Buying a home comes with ‘hidden fees’ that should be factored in when considering how much the total cost of your new home will be. These can include stamp duty, title registration costs, building inspection fees, loan establishment fee, lenders mortgage insurance (LMI), legal fees and bank valuation costs.

Tip: you can calculate your stamp duty costs as well as LMI in Rate City mortgage repayments calculator

Some of these fees can be taken out of the mix, such as LMI, if you have a big enough deposit or by asking your lender to waive establishment fees for your loan. Even so, fees can run into the thousands of dollars on top of the purchase price.

Keep this in mind when deciding if you are ready to make the move in to the property market.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

How much money can I borrow for a home loan?

Tip: You can use RateCity how much can I borrow calculator to get a quick answer.

How much money you can borrow for a home loan will depend on a number of factors including your employment status, your income (and your partner’s income if you are taking out a joint loan), the size of your deposit, your living expenses and any other debt you might hold, including credit cards. 

A good place to start is to work out how much you can afford to make in monthly repayments, factoring in a buffer of at least 2 – 3 per cent to allow for interest rate rises along the way. You’ll also need to factor in additional costs that come with purchasing a property such as stamp duty, legal fees, building inspections, strata or council fees.

If you are planning on renting the property, you can factor in the expected rental income to help offset the mortgage, but again it’s prudent to add a significant buffer to allow for rental management fees, maintenance costs and short periods of no rental income when tenants move out. It’s also wise to factor in changes in personal circumstances – the typical home loan lasts for around 30 years and a lot can happen between now and then.

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

How much deposit do I need for a home loan from NAB?

The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out.