What are the benefits for First Home Buyers?

Money in Pot Plant

By Luke Tedesco

Stamp Duty, grant’s and concession’s. What am I entitled to as a first home buyer? Does it really make that much of a difference?

Yes. It does.

Considering how hard you save to build up a deposit, it can be comforting to know that there are a few additional bonuses you can benefit from as a first home buyer.

So what is Stamp Duty? The ATO defines Stamp Duty as ‘a tax on written documents (‘instruments’) and certain transactions, including

  • motor vehicle registrations and transfers
  • insurance policies
  • mortgages
  • transfers of property such as businesses, real estate and certain shares.

In Western Australia, Stamp Duty is charged on a tiered basis, similar to the different tax rates you pay on your income. For the purpose of this article, I will highlight the dutiable value range from $360,001 – $725,000 which is $11,115 + $4.75 per $100 or part thereof above $360,000

Dutiable value

$0 – $120,000   $1.90 Per $100 or part thereof
$120,001 – $150,000 $  2,280 + $2.85 Per $100 or part thereof above $120,000
$150,001 – $360,000 $  3,135 + $3.80 Per $100 or part thereof above $150,000
$360,001 – $725,000 $11,115 + $4.75 Per $100 or part thereof above $360,000
$725,001 and upwards $28,453 + $5.15 Per $100 or part thereof above $725,000

The Stamp Duty applicable on a $430,000 home would equate to $14,440. In effect the home you are purchasing is actually $444,440 and we haven’t even started with settlement and banking costs.

So why am I highlighting this dreadful expense? As a first home buyer, you wouldn’t have to pay any of it.

Stamp Duty is exempt for an established dwelling of $430,000 or less. There is also concessional rates applied if you purchased between $430,001 – $530,000. For vacant land purchases, the nil rate of duty applies to land purchases under $300,000. That is a significant benefit.

In addition to the stamp duty exemption, if you build or purchase a new home, you could be eligible to receive the First Home Owners Grant up to $10,000.

Under the  Real Estate and Business Agents Act, a home buyers assistance of up to $2,000 may also be applied for.

Remember these tips when planning your first home purchase as it could save you thousands of dollars which lets face it, is better spent on anything other than fees & taxes.

For more information including updates to eligibility, criteria and duties speak to a Wealth Plus Lending consultant today and visit the following sites;
http://www.finance.wa.gov.au/cms/content.aspx?id=2071

http://www.finance.wa.gov.au/cms/State_Revenue/Duties/Transfer_Duty/First_Home_Owner_Rate_of_Duty.aspx

http://www.finance.wa.gov.au/cms/State_Revenue/FHOG/First_Home_Owner_Grant.aspx

The information provided in this article is accurate as of 4th March 2016.

 

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