How does the new first home buyer scheme in ACT work?

Any general questions you might have in regards to loans and finance.
Olly
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Joined: Thu Jul 11, 2019 5:53 pm

How does the new first home buyer scheme in ACT work?

Postby Olly » Thu Jul 11, 2019 5:55 pm

Hi, we’re first home buyers looking to buy in Palmerston, Canberra and trying to figure out the stamp duty payable with the new home buyer concession scheme. Could you also elaborate on the scheme and it’s qualifying criteria? Also, how does the new first home buyer scheme in ACT work?

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Otto Dargan
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Re: How does the new first home buyer scheme in ACT work?

Postby Otto Dargan » Thu Jul 11, 2019 6:29 pm

Hello Olly. Welcome to the forums.

That’s right, the first home owners grant (FHOG) in Australian Capital Territories (ACT) has been replaced by the home buyer concession scheme effective 1 July 2019. Under the new scheme, both first home all eligible buyers pay no stamp duty on vacant residential land, newly built and existing homes, and there is no cap on the property value.

To be eligible for the scheme:

  • The total gross income of all home buyers and their domestic partners (if any) for the previous financial year is below $160,000 (the income threshold increases slightly with the number of dependent children).
  • No buyer of the home including their partner has owned any other property in the last two years.
  • At least one owner lives in the home continuously for at least one year, starting within 12 months of settlement or completion of construction.

The total gross income threshold with the number of dependent children:
  • 0 dependents - $160,000
  • 1 dependents - $163,330
  • 2 dependents - $166,660
  • 3 dependents - $169,990
  • 4 dependents - $173,320
  • 5 or more dependents - $176,650
Please note that your partner’s income must be included even if they won’t be an owner of the house.

A few other changes include:
  • Mortgage Registration fee increases to $153.00 from $145.
  • Transfer Fee increases to $409 from $386.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a first home buyer home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Olly
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Joined: Thu Jul 11, 2019 5:53 pm

Re: How does the new first home buyer scheme in ACT work?

Postby Olly » Thu Jul 11, 2019 7:05 pm

No stamp duty, got it. So, how can I qualify for a first home buyer loans with no deposit?

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Otto Dargan
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Re: How does the new first home buyer scheme in ACT work?

Postby Otto Dargan » Thu Jul 11, 2019 8:39 pm

Hi Olly,

The most popular no deposit first home buyer loan is a guarantor loan.
With a guarantor:
  • You can borrow up to 105% of the property value.
  • Avoid the high cost of Lenders Mortgage Insurance (LMI).


A guarantor is someone who is closely related to you like your parents who uses their property as security for your home loan. Alternatively, you can also use a gifted deposit.

To qualify:
  • The guarantor must have enough equity in their property to cover at least 20% of the property value you’re purchasing. You can use our guarantor calculator to work out how much equity you need.
  • You must have a clear credit history.
  • If you’re using a gifted deposit, a signed gift letter must be provided stating that it in fact is a gift and not a loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Olly
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Joined: Thu Jul 11, 2019 5:53 pm

Re: How does the new first home buyer scheme in ACT work?

Postby Olly » Fri Jul 12, 2019 3:50 pm

I just used your guarantor loan calculator and it says that the limited guarantee will be $100,000 on a $400,000 property. Shouldn’t it be $80,000?

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Otto Dargan
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Re: How does the new first home buyer scheme in ACT work?

Postby Otto Dargan » Fri Jul 12, 2019 4:09 pm

Hi Olly,

Different lenders have ways of calculating the size of the limited guarantee.

But, generally, the size of the limited guarantee is calculated as:
Value of the limited guarantee = (loan amount / 0.8) – property price

For example, if you’re borrowing 100% of the property value for a $400,000 property, then the limited guarantee will be:

($400,000 / 0.8) – $400,000 = $100,000


The formula used above is to work out how much limited guarantee you’ll need to keep your total LVR at 80%. This is because any home loan over 80% LVRis considered risky and will require the borrower to pay a mortgage insurance fee (LMI).

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a no deposit first home buyer home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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