4 First Homebuyers In NSW

Real stories about the impact of the new rules.
Just bought: Weighing up the benefits

Physiotherapy student Henry Shepard has just bought a $599,000 first home in Victoria Park’s East Village, but he has no regrets about missing out on the larger first home owners’ grant being offered from October 1.

”I’ve done my calculations,” Shepard, 23, says. ”OK, they’ve doubled the grant, but they’ve also changed the stamp duty exemption.” Because Shepard’s new apartment was priced under $600,000, he paid no stamp duty under the Home Builders Bonus scheme, which ends on June 30.
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Although there are stamp duty savings under the first home buyer reforms, the threshold for the complete exemption is lower: $550,000 instead of $600,000. However, there are discounts on stamp duty for property priced between $550,000 and $650,000 (the concessions reduces 1 per cent down to zero for each $1000 spent between that range).

Shepard received the $7000 first home owners’ grant, but also a $5000 discount inventive from the developer Payce on the apartment, which has one bedroom and a study.

”Because of that new sliding scale on stamp duty, I work out that I’ve lost about $2500,” he says. ”It’s not ideal, but I’ve got the apartment now and I know I’ve secured the best apartment in the area.”
Moving in: Grant makes up for stamp duty

Susan Tran has just moved into her first home in an established apartment block in Alexandria and was relieved she claimed the $7000 First Home Owner Grant for existing property before it ends on October 1.

”It was very helpful,” she said, ”especially since I had to pay stamp duty which was a bit of a kick in the guts.”

The stamp duty exemption for first home buyers purchasing existing property ended on December 30.

She didn’t buy until April, purchasing the two-bedroom, two-bathroom apartment with parking.

And at $550,000, Ms Tran, 32, reckons it was a good deal. ”It was within my budget and a lot bigger than I thought I would get,” she says.

”I was looking last year, and a lot of the agents were saying ‘You have to get in before the end of the year’. But I felt that the prices then were quite inflated, as everyone was trying to beat the cut-off.”

Ms Tran, who works in financial services, said she isn’t disappointed about missing out on the extra incentives that come with buying a new property after October 1.

”I think that buying a new property off the plan is quite risky,” she says. ”I prefer existing property because I want to make my mark on it; put my stamp on it.”
Holding off: Time to save before big move to city

Bowral cafe owner George Guresse has decided to delay buying his first home until October 1 so that he can claim the $15,000 First Home Owner Grant.

He has his eye on a two-bedroom apartment with parking in Divercity at Waterloo, which is $649,000 and therefore under the $650,000 cut-off. At that price, he won’t make much of a saving on stamp duty.

If the property was priced below $600,000 he would have been better off buying before June 30 – the cut-off date to claim the stamp duty exemption that’s available under the Home Builder’s Bonus.

”I was going to buy somewhere about six months ago, but the builder wouldn’t give me any help so I didn’t pursue the purchase,” he says. ”But now that this budget has come into place it’s much more attractive.”

Mr Guresse, 31, plans to move to Sydney when the apartment is complete.

”That’s two years away so I’ve got more time to save,” he says.

The existing market doesn’t interest him because he wants something ”brand new”. He understands being a first home owner could make it difficult buying off the plan, but he will have a big deposit and his father would guarantee the loan as ”a worst case scenario”.
Missing out: Incentives not a paramount concern

Twins Stef and Laura Rodrigues, 27, of Woronora Heights, are first home buyers but unless they’re quick and thrifty, they will miss out on any government incentives at all.

They have been looking at existing property. If they buy something for less than $835,000 they can still claim a $7000 grant provided they buy before October 1.

Yet they’re not letting government incentives be their prime concern, having recently been underbidders on a three-bedroom Pyrmont apartment that sold for $848,000.

”Our maximum budget is in the $900,000s,” Stef, a marketing co-ordinator for a construction company, says.

”Ideally, if we could find anything we liked below that, of course we would take that. But we’re basing our decision on finding the house we want rather than any financial incentive.”

Stef and Laura, the sales and new business manager for Hardrock Cafe, are living with their parents in Woronora Heights while they look for that perfect home.

While the looming deadline isn’t a major issue for the pair, Stef does think the $835,000 cap is unfair.

”I don’t see why they have put a specific value on getting the grant, we’re still first home buyers,” she says.

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