Stamp duty is being abolished for first home buyers from 1 July 2019.
Stamp duty exemption in the ACT
From 1 July 2019, first home buyers looking to get into the Canberra property market will not have to pay stamp duty on any property purchase. This is provided their combined household income is less than $160,000.
This concession is currently only available for new builds in the ACT buy will be extended to any ACT property from 1 July. It means however, that the First Home Buyers Grant of $7,000 will be scrapped from this date.
The exemption from paying stamp duty for first home buyers could save thousands of dollars on a purchase. For example, the current stamp duty on a property valued at $350,000 is $6,700 and for a property valued at $500,000 is $12,100 (calculations based on 30 June 2019 purchase date). For some first home buyers, that could mean buying a home months or even years earlier than budgeted.
Tips for first home buyers
Getting a loan isn’t as easy as it used to be. It’s important to start preparing up to six months prior to applying to give yourself the best chance. Here are some tips:
Budget vs living expenses
Lenders no longer take your word for it when it comes to your living expenses. Rather than accepting a budget that you’ve put together, most lenders will ask to see your bank statements for up to 6 months prior to applying. They then spend considerable time adding up your expenses and comparing the amounts to what you’ve told them. Any variations are scrutinised. To keep track of your expenses try the free budget calculator provided by MoneySmart.
Lenders want to see that you have the ability to repay the loan and a proven track record. So they look at what they call ‘genuine savings history’ to track this. Genuine savings include regular deposits made into a savings account for a reasonable period (ie three to six months). Some lenders will also look at rent or board payments. You might have been given money by a kind parent or received an inheritance. It’s not enough to receive this money. Lenders want to see this amount untouched, in a bank account, for at least three months.
Personal documents in order
We see lots of people who have recently married but have not updated their name on their driver’s licence or passport. We also see people who have moved but not changed their address. Lenders are very particular about having all personal documents in order. They want to see exactly the same name on all official personal documents – including middle names. Long delays can arise when documents need to be updated. Prior to making an application, check that your personal documents are in order.
Contact Milestone today
Milestone mortgage brokers really like assisting first home buyers with their loans as we know it can be a very stressful experience. So please give Jake or Melissa a call on 6176 3110.
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