First Home Buyer stamp duty savings!
If you've been living under a rock you may not have heard that Victoria's premier, Daniel Andrews, has announced a scheme to have stamp duty cut for First Home Buyers in Victoria.
Commencing July 1, 2017, if the government goes head with this, then anyone buying a house for the first time will not pay stamp duty, providing the value of the house is up to $600,000 and has been lived in for at least 12 months.
"In the past, if you worked hard and saved enough, you could afford to buy your own home. Now, that's getting harder and harder," Mr Andrews said.
We know that it's very hard for first home buyers to be able to save enough deposit to buy a home in Melbourne at present so this news is welcomed, that's for sure.
Presently, if a first home buyer wanted to buy a property under $600k then they would get a 50% reduction in their stamp duty, bringing this cost to approx $15k (instead of the $30k approx right now).
Under the new scheme they would pay $0.
We get asked a lot if it's worth waiting and this is what we have been telling our clients.
(If it goes ahead) you will definitely save up to $15k in stamp duty vs current offer, if buying under $600k. This means more money for deposit towards the house.
Regardless, this is still 3 months away, if it gets approved.
Over the past 3 mths the city-wide Melbourne median price has gone up 7.6%, nudging it up to $826,000!
If this was applied to a $600k purchase then you would have missed out on a potential $45,600 in equity growth over 3mths (7.6% of $600k) by waiting.
Also, using these numbers, a $600k property in 3mths time is a $550k property in today's dollars. So if it keeps moving then you will be buying less property than you otherwise would if you bought today!
Of course, this is assuming the same rate of growth occurring. If you can't see it growing a this pace then think about this...
When the numbers above are seen by First Home Buyers who "can" afford to buy a property right now (who have enough deposit etc) then there will be more demand in the short term for properties under 600k. This short term demand is likely to push prices up and make short term growth a reality.
As a property investor I have been buying sub-$600k properties recently as I believe this will be the fastest moving (when chosen correctly) segment of our market in the near term.
In summary, the best time to buy, is when you can afford to.
Do you have 10% deposit saved up (to cover deposit, stamp duty etc)? If so, why are you waiting?
If not, get saving and/or get in touch with us to see if there is a way around this.
Our job is to make this process easier and I have recently employed a First Home Buyer specialist to help you navigate this, so don't wait.
Get in touch with us today!
I wish I had a crystal ball, but I don't. I'm just using logic and a long term view.
**Of course, the opinions expressed above are my own and do not take into consideration your personal needs or objectives.