First Home? To Build or Buy is the Question!
You may have heard the First Home Owner's Grant has increased for new build homes. So how do you decide whether to Build or Buy your first home?
If you can’t decide between buying your first home or building your first home, perhaps the recent announcement of the WA Government increasing the First Home Owners Grant (or FHOG as we affectionately call it) will help you make your decision.
The FHOG has been around for a while now, but in December 2016 an increase of $5000 came into effect for contracts signed between 1st January 2017 and 31st December 2017, making it a generous total of $15,000 for newly built homes. Unfortunately, the FHOG does not apply to buying an established home, however the Stamp Duty concessions still apply for established properties as first homes and costing under $530,000.
When considering building versus buying, the FHOG is a major attraction for those wanting to build. But there are also other costs to consider when building, such as having somewhere to live while your home is being built or the cost of storage for your belongings while your home is under construction. The building process can take up to 12 months
(including the planning stages) so you may want to do the sums on renting while you build, versus moving straight into your established home.
Location may be a large player when deciding to build or buy. Most blocks of land for sale are in the outer suburbs of Perth, further away from the city, your work, family and probably most of your friends. This could mean that the $15,000 gained with the FHOG may come at a cost… maybe your friends won’t visit you out in the ‘burbs or your petrol and transport costs increase to get to work or even just a night out on the town comes with hefty taxi costs. But at least you’ve got a brand-new home to come home to and very little maintenance to worry about for the first few
Buying an established property may not have the FHOG attached to it, but you can still buy a decent property in a well-located suburb of Perth that comes in under the $530,000 stamp duty concession limits. Buying a home that has already been lived in means it has someone else’s tastes and you may need to spend your weekends giving the home a coat of paint, new window treatments or just tidying up an overgrown garden. But when you’re not working on the home, you can walk to your local café, catch up with friends who live just around the corner or catch up on those extra zzz’s before taking the train to work (while your friends who built the brand-new home to get the FHOG are getting up earlier to start their long trek to their workplace).
Build or Buy – there are positives and negatives to each scenario. Weigh up your lifestyle, work commitments, location of family and friends and of course your budget. The FHOG is there to assist those building a new home and to encourage growth and housing construction in Perth. But don’t let the $15,000 be your only consideration when you are ready to take on your first property.
If you would like further details on the conditions of the FHOG or stamp duty concessions, give Brett a call and he can go through loan options with you to help you make the right decision.