The 2017 Federal Budget Announcement has piqued the interest of many young families and investors alike as the possibility of owning property comes within reach.
In the recent years, the Australian property crisis has hit a record high, with many families resigning to the fact that owning the homes they live in are simply dreams of days gone by. Rapidly growing housing prices, within a relatively strong economy, has made foreign investment within the Australian housing market a lucrative opportunity for our overseas neighbours.
This year, the Australian Government aims to provide young Australians with the opportunity to compete in the market and secure a future in domestic property ownership. Thankfully, this change affects not only Australian’s but makes foreign investments by overseas investors tougher.
Property Stamp Duties for First Home Buyers
The current stamp duty concessions provide reductions in stamp duty for First Home buyers require the property to be a brand new home, with the property being their principal place of residence, and that their purchase is their first property purchase. Stamp duty is exempt on applicable properties up to the sum of $550,000, with concessions applicable for properties between $550,000 to $650,000.
Additionally, for those looking to build their first home, and with the same conditions mentioned previously, exemptions apply to stamp duty payable on vacant land purchases up to the sum of $350,000, with concessions applicable for properties between $350,000 to $450,000.
Under the new Stamp Duty Concessions Scheme as of 1 July, first home buyers are exempt from paying stamp duty on new and existing properties up to the amount of $650,000. Concessions to Stamp Duty are available on purchases up to the sum of $800,000.
This applies to all contracts dated on and after 1 July, which is the date on which the scheme is to be introduced. The government has also introduced schemes to allow first home purchasers to use their Superannuation funds to assist with saving up for a deposit. Any salary sacrifices or lump sum payments up to the amount of $30,000 can be withdrawn and put towards a deposit for first home buyers. Under the current superannuation property investment guidelines, there are rules that prevent investors from occupying their premises, if purchases under a Superfund. The new guidelines will prevent buyers from contributing more than $15,000 in any given financial year, to a maximum limit of $30,000. Given the current property market, this may not seem like much, but it is important to remember that any superannuation contributions are made pre-tax, reducing your overall tax liabilities and ensuring that your contributions don’t end up being taxed twice.
As always, it’s best to speak to a Licensed Conveyancer or Solicitor prior to any property purchase. Our experienced and friendly staff are happy to answer any questions you may have about the new stamp duty schemes or property purchasing in general.