Applications now open for $25,000 HomeBuilder grant in all states

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It’s been two months since HomeBuilder was first announced, and I’m sure many of us spent a bit of that time dreaming about an extra $25,000 to spend on a reno or new home. The good news is grant applications are now officially open.

All states have now opened application channels (see below) for the federal government’s new HomeBuilder grants, with ACT the only government yet to provide an application form (however you can register online).

Back up, what’s the $25,000 HomeBuilder scheme?

The federal government scheme aims to assist Australians who want to buy a new home or begin work on eligible renovations by providing them with a $25,000 tax-free grant.

The scheme was announced as part of the federal government’s economic response to the coronavirus pandemic, with the stated aim of supporting more than 1 million builders, painters, plumbers and electricians across the country.

While many of the eligibility details were quickly revealed, there has been one key problem since the announcement of the scheme back in early June: there has been no way of actually applying for a grant.

But, there is now.

Here’s how to apply for a HomeBuilder grant in each state

New South Wales: Revenue NSW is now accepting applications online. For more information on eligibility and the process, visit: www.revenue.nsw.gov.au/grants-schemes/homebuilder

Victoria: State Revenue Office Victoria is accepting applications online. For more details on eligibility visit: www.sro.vic.gov.au/owning-property/australian-homebuilder-grant

Queensland: In Queensland the Office of State Revenue is taking applications. For more info: www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/homebuilder

Western Australia: For those in the west, Revenue WA is the place to submit your application. For more info visit: www.wa.gov.au/service/community-services/grants-and-subsidies/apply-new-home-construction-grant

South Australia: The South Australian Revenue Office is accepting applications. For more details visit: https://www.revenuesa.sa.gov.au/grants-and-concessions/homebuilder-grant

Tasmania: For those in the apple isle, The State Revenue Office of Tasmania is handling applications. You can visit:  www.sro.tas.gov.au/Documents/HomeBuilder-grants-guideline.pdf

Northern Territory: The Northern Territory Revenue Office is now accepting applications. For more details visit: https://treasury.nt.gov.au/dtf/territory-revenue-office/homebuilder-grant

ACT: As mentioned, the ACT is yet to provide an application form, however you can register online. For more info visit: https://www.revenue.act.gov.au/covid-19-assistance/homebuilder-grant

Get in touch

So, that’s how you can apply for the HomeBuilder scheme. If you’re keen to proceed, the next thing to tackle is financing the project.

And that’s where we can help.

If you’d like a hand obtaining finance to pay for the new home or reno you’ve been dreaming of, get in touch with us today – we’re here to help make your HomeBuilder dreams a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

$1 lenders mortgage insurance for eligible first home buyers

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You’ve probably heard something along the lines of ‘you need a 20% deposit to buy a home’, right? Well, not necessarily. Today we’ll look at two options available to eligible first home buyers, including a $1 lenders mortgage insurance offer that’s just been launched.

Now, to be fair, that 20% deposit figure quoted by your uncle Barry wasn’t plucked out of thin air. Barry’s just a little behind the times (as a scroll through his Facebook feed would attest).

Let us explain.

In the past, first home buyers typically had to save a 20% deposit to avoid paying lenders mortgage insurance, otherwise known as LMI.

Now, this insurance isn’t to protect you. LMI is to protect the bank against any loss they may incur if you’re unable to repay your loan (because they see first home buyers with less than a 20% deposit as higher risk).

The problem is that LMI isn’t cheap. For example, if you wanted to purchase a $600,000 property, but only had a 15% deposit ($90,0000), you’d likely have to pay about $6000 in LMI.

But since the start of the year, two options to avoid paying thousands of dollars in LMI have emerged for eligible first home buyers: the first being the federal government’s First Home Loan Deposit Scheme (FHLDS), and more recently, St George’s $1 LMI offer.

Let’s start with St George’s $1 LMI announcement

Basically, LMI will be reduced to only $1 for eligible first home buyers with a Loan to Value Ratio (LVR) up to 85%.

In other words, it’s for first home buyers who have a deposit between 15% and 20%.

Here are a few other important eligibility details:

– The LMI purchase must be for your first home loan and for your first property (however for joint applications, only one applicant must be a first home buyer).
– You must be the owner-occupier of the property and make principal and interest repayments.
– The offer is available on loans up to $850,000 (with a 15% deposit, this equates to a $1 million property value, which is much higher than the FHLDS below).
– Only one property can be financed per application.
– There are no income caps.

The first home loan deposit scheme

The federal government’s scheme allows eligible first home buyers with only a 5% deposit to purchase a property without paying for LMI – which can save you up to $10,000. ⁣⁣

⁣⁣But here’s the catch: only 10,000 spots are available this financial year.

⁣⁣That might sound like a lot but 3,000 spots went in the first 10 days last time.

There are a few other important eligibility details to consider here, too, including:

– Property price caps for different cities and regions across the country (ranging between $400,000 to $700,000 in capital cities).
– Income caps (singles $125,000, couples $200,000).
– For couples, both need to be eligible home buyers.

Get in touch

We understand that buying your first home can be daunting.

But the good news is that we help first home buyers apply for finance on a weekly basis, and we pride ourselves on being there for our clients to guide them through the process.

So if you’d like to find out more about one of the LMI offers above, then please get in touch – we’re more than happy to explain them to you in more detail.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Final touches on $25,000 HomeBuilder scheme announced

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The “crucial final touches” on the federal government’s $25,000 HomeBuilder scheme have been revealed. Will your build be eligible?

When the federal government announced its $25,000 HomeBuilder scheme in early June the immediate reaction from many was ‘you little beauty’, quickly followed by, ‘wait… will my project even be eligible?’

It’s a question that’s lingered for a few weeks, however we now have more clarity.

And the good news is that the Housing Industry Association (HIA) – the construction industry’s peak national body – has welcomed what it’s labelled the federal government’s “crucial final touches” on the scheme.

So what are these final touches? Let’s take a look.

More wiggle room for finance and building approvals

It looks as though homeowners now have a little more wiggle room when it comes to having their finance, building proposals and other legal requirements approved.

One of the biggest criticisms of the scheme when it was first announced was that homeowners needed to get everything approved and construction commenced within a fixed three-month timeframe.

Now, the scheme’s official FAQ on the Treasury website still states that construction must commence within three months of the contract date.

However, it now adds a provision for cases where approvals are unexpectedly delayed.

“States may exercise discretion where commencement is delayed beyond three months from the contract date due to unforeseen factors outside the control of the parties to the contract. For example, delays in building approvals,” Treasury states.

Here’s what the HIA adds on the update: “Recognising that a fixed three-month timeframe to commence building work did not reflect how dependent home builders are on other players, like the banks, the councils and building certifiers, is extremely important.”

Off-the-plan apartments and townhouses

Off-the-plan apartments and townhouses that don’t exceed $750,000 are eligible for HomeBuilder.

But what was doing a lot of people’s heads in was the timing of it all: did it simply need to be an off-the-plan purchase? Could construction have already been underway?

Well, we now have some clarification.

To qualify for the scheme the first box to tick off is that you need to sign the contract to buy the off-the-plan dwelling on or after 4 June 2020, and on or before 31 December 2020.

The second box is that construction needs to commence on or after 4 June 2020, and no later than three months after the contract is signed.

If, however, you sign the contract to buy the dwelling after 4 June 2020, but construction commenced before 4 June 2020, then the home won’t qualify for HomeBuilder.

Now, as mentioned in the above section, keep in mind that states and territories may exercise discretion where the commencement of construction is delayed beyond three months and it’s outside your control.

However, you’ll definitely want to ensure you do your due diligence on the project’s estimated construction date to give yourself the best possible chance of receiving the $25,000 grant.

Payments expected to be aligned with first home owner grants

Last, but certainly not least, Treasury released more information on the timing of the $25,000 payments.

“It is expected that, where possible, states and territories will align the HomeBuilder application processes with existing processes for first home owner grants (or similar),” Treasury states.

Basically, this means the ball is now in the court of state and territory revenue offices, which will soon outline the final details of how applicants can apply as well as the timing of the payments.

And the good news is the HIA is optimistic.

“HIA has been working closely with state and territory revenue offices and we look forward to receiving these details soon, which will assist home buyers and builders to begin taking full advantage of the grant,” the HIA said.

Get in touch

As mentioned above, while the federal government has provided its final touches on the scheme, we’re still waiting for each state and territory to confirm their own final touches.

But if it looks like you’ve ticked the above boxes and you want to start looking at financing options for your HomeBuilder project, please get in touch.

As with most things in life, the more organised you are, the better!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

You might be closer to your first home deposit than you think

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You’ve probably heard the federal government is giving $25,000 grants to eligible Australians looking to build or substantially renovate their homes. Today we’ll look at what that means for first home buyers when combined with state and territory schemes.

If you’ve been umming and ahhing about purchasing your first home for a while now, we have great news: you’d be hard-pressed to find a time when there were more government incentives to help you enter the property market.

For starters, there’s the federal government’s First Home Loan Deposit Scheme, which can help you buy your first home with a deposit of just 5% without having to pay lenders mortgage insurance (LMI) – so that’s one major cost out of the way.

But you’ll still need that 5% deposit, right?

Well, each state and territory (except ACT) has a first homeowner grant program, with most grants between $10,000 and $20,000.

On top of that, the federal government will give eligible Australians $25,000 to build or substantially renovate homes as part of the new HomeBuilder scheme (however, at this stage it’s still unclear whether or not this amount can go towards your initial deposit).

Last but certainly not least, most states and territories have stamp duty discounts or exemptions for first home buyers too, which can save you tens of thousands of dollars – another hurdle cleared!

Below, we’ll break down exactly what’s on offer in each state and territory and just how much these government initiatives could help put you within reach of a deposit on your first home.

NEW SOUTH WALES

First homeowner grant: $10,000 for new homes valued up to $750,000.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: exemption on homes up to $650,000, partial concession on homes between $650,000 and $800,000.

With HomeBuilder, you could have: up to $45,000 in government support + stamp duty exemption.

VICTORIA

First homeowner grant: $10,000 (urban) and $20,000 (regional) for new homes valued up to $750,000.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: exemption on homes up to $600,000, partial concession on homes between $600,001 and $750,000.

With HomeBuilder, you could have: between $45,000 and $55,000 in government support + stamp duty exemption.

QUEENSLAND

First homeowner grant: $15,000 on new homes valued at less than $750,000.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: exemption on homes up to $500,000, partial concession on homes up to $550,000.

With HomeBuilder, you could have: up to $50,000 in government support + up to $15,925 in stamp duty concessions.

WESTERN AUSTRALIA

First homeowner grant: $10,000 on new or substantially renovated homes valued at less than $750,000 south of the 26th parallel (latitude), or less than $1,000,000 north of the 26th parallel. WA also offers $20,000 grants for new homes built on vacant land or off-the-plan single-storey developments.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: exemption on homes valued at up to $430,000, partial concession on homes up to $530,000. An off-the-plan unit rebate is available for more expensive homes.

With HomeBuilder, you could have: up to $65,000 in government support + applicable stamp duty concessions.

SOUTH AUSTRALIA

First homeowner grant: $15,000 on new homes valued up to $575,000.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: full concession on off-the-plan new or substantially refurbished apartments up to $500,000.

With HomeBuilder, you could have: up to $50,000 in government support + stamp duty concession.

TASMANIA

First homeowner grant: $20,000 on new homes (reduced to $10,000 from 1 July 2020).

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: a 50% discount on stamp duty for established properties valued at $400,000 or less.

With HomeBuilder, you could have: up to $55,000 in government support.

AUSTRALIAN CAPITAL TERRITORY

First homeowner grant: none.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: first home buyers in the ACT pay no duty so long as their household income is below $160,00-$176,650, depending on how many dependents you have.

With HomeBuilder, you could have: up to $35,000 in government support + stamp duty exemption.

NORTHERN TERRITORY

First homeowner grant: $10,000 for new homes.

First Home Loan Deposit Scheme: LMI saving of up to $10,000.

Stamp duty: you can get up to $18,601 off your stamp duty costs.

With HomeBuilder, you could have: up to $45,000 in government support + up to $18,601 in stamp duty savings.

Get in touch

So, that covers the first home buyer schemes. If you think you might be eligible, the next thing to organise is financing your new home.

And that’s where we come in. Lenders will still want you to show some sort of genuine savings before they’ll approve a loan application, and we can help you get everything in order for that assessment process.

So if you’d like help obtaining finance to pay for the first home of your dreams, get in touch with us today – we’re here to help you any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How to avoid underinsuring your home

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With Australia currently enduring its worst bushfire season on record, we all want to do our little bit to help out, so today we thought we’d discuss the important topic of underinsurance.

Indeed, researchers are warning that the nation is facing an underinsurance crisis, according to a recent report by the ABC, with the Insurance Council of Australia saying more than four out of every five homes affected by bushfires are underinsured.

Federal MP Susan Templeman had her home destroyed by a bushfire in 2013 and had one thing on her mind as she was walking past burnt-down houses on her street: “Gee, I hope I’ve paid the insurance”.

Fortunately, her insurance payments were up to date. However, her insurer still didn’t give her the news she was hoping to hear.

While her insurer said they’d pay out her claim, they advised they wouldn’t rebuild her home as she was underinsured.

You see, even though Ms Templeman had insured her place for its market value of $400,000, the cost to rebuild was about $600,000.

“And that was just like a bolt from the blue. It completely threw us,” she said.

Ms Templeman ended up selling an investment property to help make up the shortfall. But her neighbours on either side never rebuilt.

How are homes underinsured?

Chloe Lucas, research fellow at the University of Tasmania, explains that most homeowners don’t find out that they’re underinsured until it happens to them.

“Most people use insurance calculators online and it’s very hard to get those to give you a calculation that really reflects the real value of your property,” Ms Lucas told the ABC.

“They are most often based on the market value of your property, and that’s very different to the cost of rebuilding after a disaster.”

Ms Lucas suggests owners consider adding at least 20% to what they think their house is worth to avoid underinsurance.

How else could it affect me?

Chances are, if you haven’t updated your home and contents insurance in several years, you could be underinsured.

There is also an astounding 23% of Australians who have no home and contents insurance at all, says the Insurance Council of Australia.

How can I avoid underinsurance?

Here’s a quick checklist to see whether you’re sufficiently covered:

1. Check your policy and talk to your insurer to understand how much they will currently pay and under what circumstances.

2. Pay attention to clauses around fires and floods, particularly if you live in a higher-risk area.

3. Make sure all your items are covered – many people find they are underinsured because they forgot to include new pieces of technology, home renovations or jewellery.

4. Consider the worst-case scenario – if your house and contents were to be destroyed, does your policy cover the full cost of rebuilding? Make sure you consider building costs today, rather than the original cost of building your house.

Final word

If your home or suburb has been affected by this bushfire season, please know that our thoughts are with you – we know as much as anyone how important the family home is.

If you’re in an area that’s susceptible to bushfires or other natural disasters but has not been affected this season, we hope you stay safe and that this article has been helpful.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.