Lifestyle – Buy Melbourne Apartments https://www.buymelbourneapartments.com.au Secure your perfect home or investment property before public launch. Wed, 14 Dec 2022 01:45:05 +0000 en-AU hourly 1 https://wordpress.org/?v=6.1.5 https://www.buymelbourneapartments.com.au/wp-content/uploads/2018/12/cropped-bma-favicon-32x32.png Lifestyle – Buy Melbourne Apartments https://www.buymelbourneapartments.com.au 32 32 Real Estate Fees to Sell Your House [2022 Guide] https://www.buymelbourneapartments.com.au/real-estate-fees-for-selling/ Thu, 08 Dec 2022 20:55:43 +0000 https://www.buymelbourneapartments.com.au/?p=53198 8 Real Estate Costs of Selling a House in Melbourne

Houses are a lot more than just pieces of property, with years of investment, effort and memories attached to them, which means when it’s time to sell, you want to get the best value out of them.

For many Australian homeowners, selling their home for a better one can be a milestone and whether you’re deciding to upgrade, downsize or change localities, selling your home can be a huge decision with hefty financial costs involved and may even take its toll on you emotionally. 

Familiarise yourself with real estate fees, marketing & styling costs and all other real estate charges associated with selling a home and dive into the seller’s market with all costs in check.

1. Real Estate Agent’s Fee & Commission for Selling

When selling, real estate agent’s fee can be a key cost that affects the overall price pocketed by the homeowners. Real estate agent fees refer to the payments made by homeowners to real estate agents to sell their homes.

The payments are usually made on a commission basis and the homeowner and real estate agent agree on a commission rate where the agent takes a percentage of the total cost of the house after the sale.

Even though many people consider an agent’s fee for selling a house an inescapable cost, you may choose an alternative path that removes the middleman by opting for a “For Sale by Owner” approach. In this case, the sale of the property largely depends on the vendor and a prospective client. Occasionally, a marketing company to run the marketing campaign might be involved as a third party.

In Australia, the average commission rate is unregulated and therefore varies widely along regional areas, metropolitan areas, and suburbs. According to recent statistics, the average real estate commission in Australia is around 2-3%. This figure, however, varies because of different factors.

For example, the average real estate agent commission in Melbourne is between 1.6-2.5%. In regional Victoria, it is a bit higher whereas, over in the suburbs, the average commission rate is dynamic: Hawthorn has an average of 1.91%, Carlton’s is about 2.07%, and Bendigo is about 2.34%.

Why does the Average Commission Rate Vary?

The average commission rate depends on factors such as location, the average value of the house, the agent’s individual experience, and the type of sales package provided by the real estate agent.

Some agents offer marketing campaign packages, while for others, marketing is capped as a separate fee. For the former option, the average commission rate might be higher than the latter.

Real estate agents use different payment models throughout the country, but flat rates and tiered commissions are the most common. The payment model might change when other factors are introduced, such as marketing or when no fee is paid if a sale is not made.

As an incentive to the real estate agent to put in more work towards getting the property off the market at the desired price, offering bonuses is a practice that is quickly gaining popularity in the industry. Bonuses are additional payment incentives on top of the agent’s commission. A good reason to add a bonus will be if you need the house sold within a specific date or if it has been on the market for too long.

Fixed Vs. Tiered Commission

Depending on your real estate agent’s payment model, their commission fees might be paid on a fixed or tiered basis. It is challenging to evaluate which structure benefits homeowners more since the property’s value, and the price after the sale may sway the benefits to either side of the scale.

As the name suggests, a fixed commission structure is one where the agent’s fees are settled at a fixed percentage of sale regardless of the house’s price. It is the most common structure and is more advantageous for places on the lower side of the value scale.

In a tiered commission structure, the real estate agent is entitled to multiple percentages that depend on the overall price the property is sold for. In this model, the agent earns more when the house is sold for a higher price. The percentage commission usually rises after certain financial milestones.

Tiered commission presents the real estate agent with the motivation to sell your house for the top buck and works best for more expensive homes. However, a significant drawback might be that the property will stay on the market for longer as agents often hold out for higher-priced offers, inconveniencing the homeowner.

When choosing the right agent, property owners should base their choice on their fee structure and their competency to ensure they get the best out of their property sale.

2. Conveyancing Costs and Legal Fees

Selling property is riddled with legal complications, and a conveyancer or solicitor helps you navigate challenging legal aspects. Conveyancing costs and legal fees are payments made to a solicitor or conveyancer by the home seller for legal services related to the sale of their property.

Their services usually include verifying information provided by a prospective buyer, drafting and executing required paperwork for the transfer of ownership of the property, and much more, depending on where the transaction takes place.

In Australia, the average conveyancing fees fall between $700 and $1300. The conveyancing cost may be covered in the package paid to your agent, but in most cases, you may need to pay the conveyancer and procure their services separately.  

3. Mortgage Lender Fees

When purchasing a house, homeowners occasionally resort to a mortgage lender to whom they make payments at an agreed interval for a specified period. In addition to this, a mortgage discharge fee is a payment made by the property seller when they choose to offset their expenses before time (early discharge) which may apply when property owners are selling their house.

Mortgage lender fees are one of the several closing payments made by the seller. Australia’s average mortgage lender fee ranges between $275 and $325, depending on your chosen lender.

Home sellers need to offset their home loan and additional charges in advance as the process involves filling and signing documents on both ends. It may take 2-3 weeks to finalize, delaying the process of selling your home.

4. Auctioneer’s Fees

There are many ways to sell your property, and to some home sellers, an auction presents the most convenient alternative. Many benefits are associated with auctions, thus making them a popular choice for property sales. Auctions offer a faster and relatively reliable option than putting the property on the market.

On average, selling your house through an auction will take 6-8 weeks after the gavel falls, but the buyer is obliged to pay 10% on the auction day. In addition to speed, competitive bids might allow you to sell the house for the best price.

There are many more advantages to selling your house on auction, but should you choose to do so, you need to settle the auctioneer’s fees. The average auction fee in Australia is $200-$300 for a single auction and your agent may help you find a suitable auction. However, the cost will be more if it takes more than one auction to sell the property. 

5. Real Estate Marketing Fees

The cost of marketing your house is an essential consideration when selling your property. Depending on the marketing agency of your preferred real estate agent or their partnership with photographers, newspaper outlets, and more, the marketing costs may vary. Like every other factor, you are free to negotiate with your agent on the advertising costs incurred.

You may bundle the marketing fees with the real estate agent’s general commission or pay the money upfront. You may also choose to pay costs as they are incurred, meaning that you will only pay when a marketing or advertising activity is conducted.

Properly advertising your house might be the difference between attracting a pool of buyers with the financial capability to purchase your home and having it stay on the market for an extended period. Normally, your marketing payment is  used to cover the following essential costs:

  • Creating an ‘Open House’ sign or a ‘For Sale’ signboard
  • Creating a property listing in the press
  • Creating a property listing on real estate websites
  • Drafting a professional floor plan
  • Professional photography and videography sessions
  • Auctioneer’s fees should you choose to sell your house through the auction process
  • Open inspection brochures

Average marketing costs range from $250-$800. It is important to note that whether or not the house is sold, you will be required to cover the marketing costs.  

6. Repair and Renovation Costs

To get the best price for your property, you must put your best foot forward by ensuring your house is in peak condition. Unless you specifically target a fixer-upper audience, ensuring that your home appears well-maintained and ready to move into is vital.

On one hand, repairs and renovations can positively affect your house’s appraisal value and sale price, while on the other hand, carrying out repairs might be time-consuming and also lower your profit margins. Homeowners must approach the renovation process carefully and avoid making extravagant and unnecessary changes.

The best way to know recommended repairs  is to ask a professional real estate agent, as they handle different houses daily and can suggest what you need to do to make your home stand out. The costs for repairs and renovations are highly variable and depend on the kind of work you will be getting done. Common repairs and renovations include:

  • Painting
  • Wallpapers
  • Changing door handles and knobs
  • Mowing the lawn
  • Leaf blowing
  • Changing flooring
  • Unclogging pipes and sewage systems
  • Fixing leaking faucets
  • Bathroom renovations  

7. Home Staging and Photography Costs

It is easier to convince potential buyers to purchase by allowing them to envision themselves living in the house. For this reason, home staging is essential to give an empty house a feeling of home. Staging a house with quality interior design makes a home look more homely and could be that push needed for prospective buyers to decide.

You may choose to have your home partially staged or fully staged and costs can vary considerably from $500 to $10,000, depending on the home stager hired,  type of staging service and the size of the house. Whether you are simply changing the wallpaper in the house or renting modern and trendy furniture, home styling will do a lot more than just bump your property sale value by also helping to cut down on the average time houses stay on the market.

Once staging has been done, photography costs can vary between $150 to $400 for professional photos taken of the staged house. These are then circulated on real estate websites, press and publications. Conducting an open house in a staged place is also a great way to introduce potential buyers to your home. 

8. Capital Gains Tax

For the average home seller, the core cost of selling your house includes real estate agent commissions, closing fees and capital gains tax. On average, the cost of selling a house amounts to between 3-8 per cent of the actual sale.

In Australia, you may need to pay Capital Gains Tax if the selling price for your property is higher than the buying price of the property. If you are a citizen of Australia and have owned the property for over 12 months without using it for business, you are entitled to a 50 per cent tax exemption. Capital gains tax is also relative to your taxable income and can be easily calculated using the ATO’s CGT calculator.

Real Estate Fees Compared to the Other States

Different factors contribute to the overall cost of selling a house, some of which vary from state to state. Demand and supply are crucial in determining the average cost of selling a home, but real estate fees are the most significant contributor. The average real estate fees when selling a home for the following regions are:

New South Wales

New South Wales has among the lowest agent commission fees in the country, with realtors pocketing an average ranging from 2.5-3.5%. In regions with lower demand for houses, the commission percentages are usually a bit higher as it is harder to sell the house.

Sydney

Property in Sydney goes for a higher value than in many other places in the country; therefore, real estate agents benefit more from the sale of average houses. For this reason, Sydney enjoys one of the country’s lowest agent fees, with a commission percentage amounting to between 1.8-2.5%.

Queensland

In Queensland, the most preferred payment model for real estate agents in the tiered commission structure. The agents receive a commission of about 5% on the first $18,000 and 2.5% on any additional price reached by the agent. You may, however, negotiate with your agent for more competitive rates.

Brisbane

Like in regional Queensland, Brisbane agents utilize the tiered commission structure where agents receive a commission of about 5%on the first $18,000 with an additional 2.5% for prices above $18,000. The Brisbane South region has the highest commission rate, followed by the East and the West.

Tasmania

Tasmania has a relatively high commission rate compared to other regions in the country, with real estate agents making about 3.25% off the total cost of selling the house. This is primarily because of the difficulty of selling a home in the region.

Others

Regions such as Western Australia have an average commission rate of 2.45-3.25%, South Australia between 2.75-3%, and the Northern Territory which is about 2.55%.

Consult an Agent

Since real estate agents’ fees are not regulated by a government body, they vary widely from region to region. For this reason, homeowners must familiarize themselves with their respective real estate market to make informed decisions when settling for an agent or other means to sell their property.

Negotiation is always a recommended option when agreeing with your real estate agent on commission rates which should be made according to the average commission rates of the area. To fully understand your area’s agent commission rates and other selling costs, you can use your postcode or suburb to search for the estimated averages. 

Reach out to an agent for more clarity on expected costs on the type of property you are selling to get the best deal for your sale.

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Understanding Strata Title vs Freehold in Australia https://www.buymelbourneapartments.com.au/strata-title-vs-freehold-property/ Fri, 25 Nov 2022 02:44:19 +0000 https://www.buymelbourneapartments.com.au/?p=53280 Property Titles in Australia

If you’re a property owner or plan to become one, it can be challenging to understand how property titles differ. Nevertheless, it’s crucial because these titles and building by-laws govern and restrict property owners’ decisions and changes to their properties or lands.

Property titles and responsibilities are full of legal and technical jargon, which can leave a non-expert confused. That begs the question: how do you distinguish each property title? In this simple guide, we’ll set the record straight about the strata title vs freehold in Australia. We’ll also shed some light on the different types of property ownerships.

Types of Property Ownership

Simply put, a property title is a document that demonstrates your legal ownership of a property or land. You’ll find distinct types of property ownership titles in Australia.

  • Freehold: A Torrens title or freehold makes you the sole owner of the building and land on which it’s built. Think detached or single-family homes. With most commercial and residential properties falling under this property title, it’s the most common type (and for a good reason). After all, you have complete freedom over renovations, selling, and property use within reason. Expectedly, freehold investment properties tend to be on the costly side.
  • Limited Torrens: This title property isn’t properly surveyed by Land Registry Services (LRS). Accordingly, it won’t have clear boundaries of land or poverty. However, you can pay a fee to have the property investigated and submit a plan of survey with the property boundaries. Then, you can change it from a limited Torrens title to a regular Torrens title property.
  • Leasehold: If you invest in a leasehold title property, you’re buying the property (condo, house, structure, or townhouse) and leasing its land. The landlord is usually the Australian government or first nations group. You’ll find leasehold title property in rural areas. They may be churches, wheat properties, and cattle farms. The main downsides of this type are that it’s difficult to finance and doesn’t give you the capital growth of a freehold property.
  • Strata title: These titles give you full ownership of a unit, townhouse, or apartment and shared ownership of a ‘common property’. That means you share the ownership and responsibilities of areas, such as elevators, gardens, stairwells, entrance halls, and swimming pools with other property owners. There are various strata schemes available in Australia, as you’ll see, but you only own part of a common piece of land.
  • Community title: This is similar to strata title in its shared ownership of a property with others. However, it’s exclusive to large property estates, including neighbourhoods, subdivisions, and complexes. A property needs to be divided into at least two lots to be considered a community plan one. And all owners of a community title property make payments for the upkeep of the common area (like driveways).
  • Company title: Before the invention of the strata title, company title properties were widespread in the 1960s. Individuals would buy shares in a company title corporation – built under the Corporations Act 2001. Accordingly, each stakeholder can own, use, and reside in a unit and share any common property with other stakeholders. Still, the company remains the registered proprietor of the building and land.
  • Retirement villages: These communities that offer senior Australian citizens accommodation and services can be in any of the property titles above. The land may be registered under strata, community, leasehold, or other ownership models. Owners can rent out or buy retirement villages, but they’ll have to abide by some financing method restrictions.

Torrens Title vs Strata Title Properties

Strata title and freehold torrens properties are the most common options. The main difference is that freehold ownership gives you the land and property, whereas strata ownership only gives you a unit in a building.

Freehold is mostly seen in detached houses, but strata plans are common in apartments, condos, and townhouses. Torrens title plans don’t have common areas. Whereas, strata-plan residents may share foyers, elevators, gardens, fences, and driveways.

Another difference between the two title options is seen in the body corporation. With Torrens title properties having a single owner, they don’t have a body corporation, but strata title ones do.

Torrens titles are usually more expensive than Strata titles. After all, the owner is liable for all maintenance costs, and their ongoing costs are also higher. As for Strata title owners, they only pay a quarterly fee to help maintain the common areas.

If you’re looking for the best long-term investment, freehold properties typically appreciate over time. However, a strata title property value may increase or decrease depending on the value of the surrounding units.

Regarding restrictions, freehold titles grant you full control, whether that means having pets, throwing BBQ parties, making renovations, or selling at any time. To compare, strata title properties may come with these restrictions and more.

Freehold Strata
Ownership Land and structure Unit only
Property types Detached house Townhouse, Apartment, Condos
Body Corporation None Existent
Shared Common Areas None Foyers, elevators, gardens, fences, swimming pools, driveways etc.
Price Expensive Affordable
Value Appreciation Excellent Dependent on other units and Strata restrictions
Restrictions None Pet ownership, parties & entertainment [e.g. BBQs], renovations, and selling

Build Strata vs Survey Strata

The Strata Titles Act provides two forms of strata schemes. On the one hand, build strata schemes are also called strata schemes, which makes sense when you consider the similarities. The scheme refers to the subdivision of a building by cubic space. Also, it may involve the division of surrounding land into lots.

Regarding pricing, build strata schemes lower the cost of creating titles than survey strata. But you’ll need to finish the building process to issue such titles.

On the other hand, survey schemes are similar to freehold land parcels. Their plans only feature the surveyed land boundaries (not the buildings) as defined by a licensed land surveyor.

Still, survey strata schemes can have common areas, by-laws, and other features of strata title properties. Also, you don’t need to finish the properties before issuing titles because these schemes don’t show any buildings.

Role of Owners Corporation & Lot Owners

A body corporation is a legal entity and a committee composed of many owners who manage and maintain the common property. As mentioned, strata title properties have body corporations, but freehold properties don’t because there’s no common or shared area to manage.

In a strata title property, the committee makes decisions governing the use of common property and establishes rules and by-laws that owners and tenants must abide by. However, they must be legally registered and shouldn’t be too harsh. Then, the body corporation oversees the implementation of its rules and by-laws.

Strata management includes handling noisy residents, car parking, and more. Lastly, the committee manages the fees collected from owners by budgeting, keeping financial records, and using the funds to repair common property and conduct renovations.

Anyone who buys a lot in such a property or rents it has responsibilities. Aside from following rules and by-laws, there are annual general meetings (AGMs) where attendees appoint committees, appoint office-bearers, and make large-scale decisions. But, you can skip the meetings and appoint a proxy to attend on your behalf as well.

Of course, owners must pay the required fees and levies, which are quarterly payments agreed upon in AGMs and used for building maintenance. Also, owners must notify the body corporate if the lot owner or tenant changes. Finally, they’re financially responsible for their lots, which includes repairs and upgrades.

Deciding on the Type of Property Ownership

Overall, property titles are legal documents that prove you own property or land. More specifically, they determine the type of ownership you have. Is it full ownership, including property and land, or is it partial? Is the land owned or leased? Do you share common property with others?

Whether you’re purchasing a new home or commercial property, you must carefully decide on the best property ownership form and understand each title certificate’s fine print. Contact a real estate agent or property manager to make the right choice for your goals and make sure to discuss these factors when you buy a property.

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Guide to Buying Investment Property with Your Super https://www.buymelbourneapartments.com.au/buy-investment-property-with-super/ Fri, 18 Nov 2022 00:17:37 +0000 https://www.buymelbourneapartments.com.au/?p=53245

Using Your Self-Managed Super Funds [SMSF] for Property Investment

 

Investment in property is a lucrative option for Australians and investing in residential and commercial property can generate a side income for many. 

 

Thinking of buying a house as an investment? Coming up with a down payment and covering initial costs for your property can be a significant financial expense and you may struggle with arranging the required funds. 

 

One great way to pay for your investment property is through your super funds. Even though it is an option many people forget when buying property, using super funds can be a great idea. Before you go on to use your super, make sure to go through this simple guide.

Can You Use Super To Buy Property?

While you can use a super fund to buy property, you can’t use all types of super funds to purchase a property.

 

There are rules for buying a property with super you intend to live in versus an investment property you plan to rent out. It may not be as easy as withdrawing the funds you need from your super and using that money to buy your choice of property. 

 

Many different kinds of Supers exist but the two main types are regulated superannuation funds and self-managed super funds. Superannuation funds consist of retail, corporate, public sector, and industry funds, while an SMSF is one you can choose to invest on your own instead of having a fund or investment manager choose your investments. With SMSF, it’s expected that you are an expert fund manager, with expertise in choosing between a mix of investments that aren’t necessarily restricted to an industry sector or type of company. 

 

If you want to purchase a property, you must withdraw funds from an SMSF, whereas you will not be able to utilise your for-profit or profit-to-member investments like those from your regulated superannuation funds.

What Kind of Property Can You Buy With Super?

The types of property you can buy with a super fund are limited. With a self-managed super fund, you can buy commercial investment properties or a residential property you don’t intend to live in.

 

You can’t use money from your SMSF as a downpayment on a home loan for a property you want to use as your residence. 

 

In addition, a fund member or a related party of the fund members cannot live within the property. Known as the arm’s-length rule, the definition of a related party can include individuals such as relatives, spouse, children,  and extends to your business partners or trust members as well.

 

That said, Australians wishing to buy a home to live in and are first home buyers can consider the First Home Super Saver Scheme. In Australia, this scheme lets you save for a home loan deposit or downpayment through voluntary contributions to a superannuation account. There aren’t any minimum or maximum value restrictions on the home’s purchase price but the residential property must be within Australia’s borders. 

Using SMSF To Buy Property

When you buy property with SMSF, you’ll need to follow various rules and considerations set in place. Every homeowner must know these rules before deciding to proceed with a property investment. Otherwise, there can be penalties and legal consequences for incorrectly using a super.

 

1 Setting up an SMSF doesn’t require a minimum balance. However, you need enough funds and cash flows to accommodate property payments and account fees. For example, the ATO mentions some fund charges which can include the following:

 

  • Investment related expenses
  • Operating costs
  • Management and administrative fees
  • Audit fees
  • Australian Securities and Investments Commission annual fees 

 

With an SMSF, you need to budget for these expenses and ensure you’re contributing or earning enough from your investments to fund them.

 

2. An SMSF can have one to four fund members who are responsible for making decisions about the fund including investment decisions regarding how to use available funds. Fund members may decide to invest in shares depending on everyone’s financial preference, but investing in property is often more desirable because it offers higher returns and stability.

 

3. An SMSF also requires trustees who can be from amongst fund members, be either an individual, or a corporate trustee who ensures members follow all compliance requirements. 

 

4. You can’t use all of your super fund balance to buy an investment property. Some funds can’t be put into a property investment because you must leave them behind as a buffer. A liquidity buffer is a requirement with some forms of cash and share investments and must represent 10% of the property investment value. 

 

5. The bank or lender usually lends a lower amount to the fund than that lended to an individual buyer [around 60-70% of the total property value] and the interest rate charged may also be higher than that for an individual buyer.

 

6. Another stipulation is that related parties and fund members cannot take out loans against or sell assets to an SMSF. This rule applies as long as you’re using funds to buy an investment property. Related parties include:

 

  • A trust that a fund member or one of their associates controls
  • A company that a fund member or one of their associates controls or influences
  • Relatives of any fund member
  • Business partners of every fund member
  • Spouses and children of fund members’ business partners
  • Employers who make contributions to fund members’ superannuation funds

 

 

Since this list of related parties can become extensive, full and prompt disclosure is critical for compliance.

Using Super for Property Loan

 

The SMSF can also be used in making a deposit to get a loan which is then used to buy a property. While you can’t use super funds to cover the property’s price, you can cover the remaining price with a home loan. As you may already be aware, your deposit or down payment represents a certain percentage of the total purchase price. 

 

Using SMSF funds for your deposit gives you the advantage of leverage and gearing. However, you must get the approval of your SMSF trustee under a Limited Recourse Borrowing Arrangement. Also known as an LRBA, this agreement involves the trustee taking out a loan from a third party lender, such as a bank.

 

The trustee then uses the loan money to buy property under a separate trust. It’s important to seek professional advice from a skilled financial adviser before you use SMSF funds for a property loan deposit as the process can be expensive in the long run. 

Residential vs. Commercial Property Investment

There are fewer complications when you buy property for investments with super funds if you intend to purchase commercial property instead of a residential one.

 

Commercial property is real estate that owners, and organisations typically rent out as office or storefront space to businesses. It’s an investment for property owners since they earn rental income to pay back mortgages and keep as savings.

 

While you can use SMSF funds for a residential property, you can’t live in it. Neither can any related parties. Someone else must rent and live in that property. 

 

In addition, you can’t use SMSF funds for an existing residential property you already live in. This scenario might come up if you need to refinance a current loan. The rules clearly state that the fund cannot buy assets from its trustees, members, or related parties. 

 

That said, there are investment rules for commercial properties you should know about: 

 

  • You can sell or lease existing commercial properties to fund members and related parties.

 

  • Compared to traditional lending, the typical loan-to-value ratio is also lower when you apply for a commercial property loan.

 

  • Small business owners who buy commercial properties and rent them out must pay the rent directly to the SMSF. Rent should be based on the market rate and paid in full each month. 

 

  • The investment must also pass the sole purpose test, which represents the SMSFs goals and purpose. This purpose is usually to provide retirement benefits through the property’s yield and the expected capital growth in the property’s value.   

Tax Implications of SMSF Property Investment

A property investment using SMSF funds has several tax implications which can include:

 

  • A 15% tax on SMSF income including rental income and capital gains.
  • One-third discount on capital gains from increase in property value if you hold the property for more than a year [12 months] before selling. Your capital gains tax goes down to 10% [1/3rd of 15%].
  • Interest payments are tax deductible if you purchase investment property with a loan.
  • Once trustees start receiving retirement benefits or pension payments, rental income and capital gains become tax free.
  • Transferring property may have stamp duty, capital gains tax, or other tax implications.    

Get Expert Advice

SMSF funds can help you purchase property for investment and benefit you at retirement. However, to enter into the property market SMSF members should devise a sound investment strategy and evaluate their financial situation before diving into this form of investment.

 

This is why it’s best to reach out to a financial expert for additional clarity. They can help you better anticipate the expected costs and benefits of using an SMSF.

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Government Downsizing Incentive Is Here [Must Read] https://www.buymelbourneapartments.com.au/government-downsizing-incentive-scheme/ Thu, 10 Nov 2022 23:10:28 +0000 https://www.buymelbourneapartments.com.au/?p=53204 Seniors Downsizing Incentive Scheme for 2022

If you’re looking for the latest pension news Australia 2022 has to offer, the Federal Government is providing incentives for elderly to downsize homes. Initially proposed by the Coalition, the seniors downsizing grant would be implemented if the former Prime Minister, Scott Morrison, was re-elected.

Morrison said, “We are now giving Australians more choice to decide how they want to live the next stage of their life by removing financial barriers for people wanting to downsize their home”, adding, “By removing barriers for Australians downsizing to residences that better suit their needs and lifestyle, we are helping to free up larger homes for younger families” – referring to the fact that a pensioner can move into a smaller home, boosting the housing stock.

Recently, updates to the downsizing incentive scheme have been introduced in Parliament and launched by the Federal Government. According to the Social Services Minister, Amanda Rishworth, they will “benefit thousands of pensioners and other recipients each year”.

Benefits for Pensioners in Australia

As a result of  the new Government downsizing scheme, there are now incentives for the elderly to downsize their homes. They’re further offered an extended asset test exemption and a better tax break on their home sale proceeds.

The assets test exemption is extended from 12 to 24 months for principal home sales (along with 12 months in certain cases), while the tax break has been extended to allow up to $300,000 from a family home sale to be put into superannuation without a penalty.

Downsizer Superannuation Contribution Program

The age pension provides financial aid to eligible older Australians and allows them to maximise their income. Its rates are adjusted to accommodate changes in living costs and wages.

When it comes to eligibility, citizens must fulfil residence requirements and means test qualifications. That’s in addition to meeting the pension age, which is currently 66 years and 6 months.

Another income source for pensioners is superannuation. The employer puts this money in a super account during an employee’s working years to live on during retirement, and its value depends on super guarantee rates. Depending on the situation, the eligibility for most individuals to be able to access superannuation is around 55-60 years.

With the new legislation, individuals over 65 can sell their family homes of over ten years and allocate $300,000 of the sale proceeds to their superannuation. Couples can also contribute $600,000 to their superannuation for the same home, doubling the benefit. The downsizer contribution won’t affect contribution caps, attracting tempting tax breaks.

As for the downsizer age requirement, the new legislation has decreased it from 65 to 60 years since the first of July. Additionally, the Coalition intends to reduce it to 55 if re-elected.

Asset Test Exemption for Pensioners

Referenced earlier, the means test is composed of an income test and an assets test. The social security system refers to deeming rules to evaluate a senior citizen’s income from their financial investment.

  • Firstly, the income test affects the pension value – a high income (over the pension limit) means a lower pension. That test considers all sources of income for you and your partner.
  • Secondly, the assets test determines if you’re eligible for the age pension, carer payment, or disability support pension. To add, it plays into the pension amount. 
  • Finally, your assets and relationship status come into play.

Originally, family homes were exempt from asset tests. However, the proceeds from selling them weren’t, which deterred people from selling their houses and moving into smaller and cheaper homes.

The current policy excludes sales proceeds from your asset test for 12 months. This rule buys you time to purchase a new home or work on your asset portfolio after selling. Even better, starting from Jan 1, 2023, the asset test exemption will be extended from 12 to 24 months.

The policy’s goal is to reduce pensioners’ financial burden when they downsize their homes, encouraging them to take the step. This way, they have more time to buy, repair, build, or renovate new housing before their pensions are reduced.

Stamp Duty Relief for Downsizers

The stamp duty, also known as land transfer duty, is a tax fee that state and territory governments collect when you buy a new property (calculated as a percentage of its purchase price). It’s also applicable to leases, motor vehicle registration & transfers, transfers of property, hire purchase agreements, and insurance policies.

It’s worth noting that stamp duty rules vary according to your state or territory. Generally, they apply to downsizing homes and buying land for that purpose. However, some lucky Australians get to enjoy a stamp duty exemption incentive!

An older Australian citizen living in Victoria can sell their home and buy a smaller property or land to build one and get an exemption or reduction on the stamp duty. To qualify, you must be at least 60 or a member of the NT Concession Scheme. Note that you can benefit from this exemption only once.

This downsizing incentive scheme removes another obstacle for pensioners buying new homes, allowing them to save up to $12,750! After all, the fee can get expensive and is usually paid upfront. For the same reason, first-home buyers and other special categories of buyers can benefit from the tax exemption.

Seek Further Advice

The new legislation allows pensioners who downsize their homes two main benefits. For one, they can contribute up to $300,000 of the home sale proceeds to their superannuation. Also, the proceeds will be exempted from their asset test for an additional 12 months.

However, some people are doubtful of this legislation’s success. They’re concerned most retirees are emotionally attached to their family homes, having lived in them for many years. This factor can stop them from selling them despite the financial incentive offered.

However, if the incentive is still successful, this legislation will free up numerous homes for new families. After all, Australia has two million pensioners who have their own homes, so encouraging them to sell will reduce housing shortages.

Whether for retirement savings or health and mobility reasons, downsizing is a difficult decision. Accordingly, homeowners should consult with financial and real estate experts before making such life-altering decisions.

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11 Ways To Keep Your Mortgage Payments Down https://www.buymelbourneapartments.com.au/ways-to-keep-your-mortgage-repayments-down/ Thu, 03 Nov 2022 21:19:19 +0000 https://www.buymelbourneapartments.com.au/?p=53145 How To Prepare Your Repayments for Interest Rate Hikes

Loans and mortgages in Australia continue to be impacted by rising interest rates. The economy is yet to recover from the effects of the pandemic forcing the Reserve Bank of Australia (RBA) to increase the rate to contain the effects of inflation.

Currently, the rate stands at 2.6% after the cash rate increase in October. However, experts expect this figure to increase further in the coming months.

Increasing interest rates bear troubling news for homeowners who have recently taken on home loans on new homes or those who have mortgage payments to go on their previously borrowed home loans.

Australian homeowners, do not need to panic just yet, as the home loan interest rates are still much lower than historical rates, and by following these 11 tips on mortgage repayments, you may be able to stay on top of your home loans.

1. Review Your Budget

Start by reviewing your financial habits. Check on your spending and savings, or your income vs. expenses.

If you don’t have a periodic budget, it’s time to start documenting your finances. This can help you stay on top and make the necessary financial changes to accommodate the hiking loan rates. 

Look at how much you spend on each budget category from your utilities, food, entertainment and leisure, savings and investments, and other bills. Then, identify how you can cut down on some items to create extra finances to cover your home loan repayments. 

For example, if you plan to have two vacations annually, you could either reduce them to one, or explore budget travel. In other instances, you could curb your out-of-home entertainment activities such as eating at a restaurant or going to the movies with cheaper options of cooking and watching TV at home. 

It can further help to analyze and improve your utility bills. You could invest in energy-efficient appliances, install smart meters to monitor and control electricity usage, switch electricity plans [e.g. for off-peak & peak charges], or limit your phone bills [perhaps by making maximum use of WiFi connections] to create an extra layer of finances to cover your increased loan rates.

It could be imperative, given the times, to have an emergency fund in your budget as well. An emergency fund should cater to at least 2-3 times your monthly budget. It supplements your current budget and is available for many unforeseen expenditures which could include the higher loan repayments.

2. Re-evaluate Your Home Loan

When your home loan interest rates go up, it may be time to review your loan options. Consult your mortgage broker or agent to understand the feasibility of your loan and its impact on your finances. Brokers can suggest home loan refinancing, a higher down payment, or improving home equity to solve your financial crunch. 

With the help of a mortgage broker, you can compare and understand which solution fits your current home loan repayment potential. Various lenders offer different refinance solutions in the wake of rate hikes. It’s up to you to analyze the feedback from the experts and lenders to check if the loan still serves you well or may require some tweaking.

3. Consolidate Debt

Many Australians have other repayment commitments from additional debt like car loans, education loans, credit card payments, or other personal loans. In that case, you can consolidate your loans to ease the impact of the hiked rates.

Consolidating these loans together with the home loan reduces your repayment budget as home loans usually have the lowest rate out of all. You’ll have one financial institution absorb the other loans and recalculate your repayments based on their interest rates. 

Instead of having two to three monthly repayments, you focus on making just one. Before consolidating your loan, visit a financial expert or broker to advise which financial institution to partner with and whether debt consolidation may be the right option for you. 

4. Consider an Offset Account

An offset account is a savings account linked to your home loan account. The homeowner or borrower deposits their savings or salary in this account. The money in this account offsets your debt, causing a dip in the interest rate on the amount owed. 

For example, if you have a home loan of $200000 and have $40000 in your offset account, the interest rate is only applicable to $160000, reducing your repayments. The other benefit of offset accounts is that the money in your account is still accessible to you and it only acts as a guarantee of the amount owed. 

5. Make Extra Mortgage Repayments

Home loan interest rates may continue to rise this year. Thus, taking advantage of these ‘low’ interest rates and working on increasing your current repayments might also be a good option.

Extra mortgage repayments reduce the amount owed and shorten your repayment period. Also, they lower your interest rate charged across the loan’s lifespan.

Look for ways to increase your cash at hand and increase your repayment frequency. Take note of your loan type before committing to your extra loan repayments. Some loans, such as fixed-rate loans, attract additional fees or penalties if you have extra repayments. 

Consult your loan agent and review your loan clauses before starting your additional payment plans. You can also make several lump sum repayments to offset your balance.

Using a loan redraw facility can be a vital saving account for homeowners. Some borrowers on variable rate loans choose to overpay their repayments for their withdrawal and usage later. Various lenders use different methods to allow access and withdrawal of these additional amounts. 

6. Explore Fixed Interest Rates

Fixed interest rates have specific rates for the loan repayment period. On the other hand, variable interest rates have fluctuating rates based on market values. Therefore, when the interest rate rises, borrowers with varying interest loans have to adjust their repayments.

You don’t have to worry about the increased rates when you have a fixed-rate home loan. Your repayments and amount of interest remain constant until you repay your loan.

With interest rates rising, fixed-rate home loans could be better than variable-interest home loans as they may provide financial stability and certainty allowing you to manage your finances without stress. Talk with your mortgage broker about this option.

7. Utilize Your Tax Refund

Using your tax refund to offset your home loan or mortgage will help you to keep your repayments down. You can get your tax refund or bill from 1st July to 31st October.

You only need to file your tax returns with your tax agent within the period. You should get your tax refund within at least two weeks after you submit your request. 

Sometimes home buyers prefer to re-invest or save this amount. But using it to repay your mortgage has numerous benefits, including lowering your interest rate and helping you to manage your financial obligations. 

8. Ask for a Lower Home Loan Rate

Negotiating for a lower interest rate could help you manage hiked rates. Look at the rates for multiple lenders before approaching your lending agent for renegotiation. Ask them to match the low-interest rates to reduce your repayments and interest rates. Inquire about any additional fees or rates you will incur in the interest rate change. 

Banks charge higher interest rates for long-term customers, while reserving the more competitive rates for new customers. After the negotiation, you may have a better idea of whether to stick to your current loan or consider the need to refinance your home. Talk with your mortgage broker about this option. 

9. Avoid Additional Debt

Getting additional loans or building credit card debt on top of increased interest rates could pull you down financially.

Evaluate which loans are essential to renew after you complete your loan term and work on alternative financing methods. This means avoiding indulging in more loans or signing up for installment options such as Afterpay without a legitimate need. Instead, adjust your financial solutions to using debit cards and the cash available at hand. 

10. Prioritize Savings

Having a savings and emergency account is critical in your financial portfolio. Always include a savings and investments tab in your budget. Find out how you can make savings through high profits or high-interest savings accounts. 

Saving accounts is a cushion in case of any financial incident like loss of income or higher interest rates. In addition, having an account that provides interest over time helps counter inflation effects. 

Look at how various institutions handle their savings accounts before engaging with them and evaluate if the rates match or are better off than the current inflation or interest rate to benefit from the account. 

11. Pay Principal With Interest

Paying an interest-only amount should be the last resort for any homeowner as it actually increases your overall payments. When paying off the monthly interest without offsetting your principal amount, you can reduce your current mortgage repayments. It’s a temporary fix if you’re not financially stable. But, it adds to the total interest owed while also requiring you to pay off the principal amount later.

Therefore, the ideal option is to always work on paying your principal amount and interest rate to manage your mortgage repayments and home loan better in the long term. 

Final Word

With these tips, you can manage your mortgage repayments by lowering your interest rate, shortening your repayment period, or improving your cash flows. 

Interest rates are expected to rise further in the near future so for homeowners it is best to start on your plans to keep mortgage repayments down as soon as possible. 

For those looking to buy a house, it may help to buy sooner and get a competitive rate, and to reach out to a real estate agent or mortgage broker to help manage your property and home loans.

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Increase in Interest Rates & Mortgage Repayments https://www.buymelbourneapartments.com.au/interest-rate-and-mortgage-repayments/ Fri, 28 Oct 2022 00:13:54 +0000 https://www.buymelbourneapartments.com.au/?p=53077 Rising Interest & Home Loan Rates

Back in May, the Reserve Bank of Australia (RBA) increased the cash rate to 0.35%, and it soared again to 0.85% in June. Then, in July, the RBA raised it by 50 basis points, making it 1.35%. In its latest October board meeting, the RBA boosted the cash rate by 35 basis points to 2.60%.

According to Westpac economic experts, the RBA might increase the cash rate by 25 basis points each month until February 2023, leaving it at 3.35%. Commonwealth bank is more optimistic, foreseeing only one more 25 basis point hike in November before the rate comes to a halt.

While it used to increase the cash rate with increments of 0.25%, the RBA is increasing it significantly to compensate for the bounce back in economic recovery and contain the inflation following the pandemic in Australia.

These interest rate increases may raise mortgage repayments for homeowners who have taken home loans lately or previously. After all, the cash rate is a benchmark for home loan interest rates. In other words, lenders tend to use it to adjust their variable interest rates, making the home loan rate a few percentage points higher than the cash rate.

How Much More Will My Mortgage Be?

With the cash rate hikes, most lenders have increased their variable rates. In fact, they’ve passed on the cash rate rise fully. So, homeowners can expect an increase in their mortgage repayments, especially if they’ve recently taken on a home loan and are yet to repay the bulk of it.

For example, if you’ve taken on a $500,000 home loan with a 25-year loan period, the existing average owner-occupier variable rate might have been 2.86% in April. That means you’ll be paying $687 more. Let’s look at RateCity’s table to get a better idea of the increase in the monthly repayment:

Month Mortgage Repayment Increase Increase (%)
April $2,335
May $2,400 $65 2%
June $2,532 $197 8%
July $2,667 $333 14%
August $2,807 $472 20%
September $2,949 $614 26%
October $3,022 $687 29%

Now, if you’re asking: “how much more will my mortgage be? And how much will my repayments go up?”, you can use this rate checker. Just add your loan amount, loan term, current interest rate, and home loan rate increase to find out.

Unfortunately, homeowners on a fixed interest rate aren’t entirely safe either. They’ll face the ramifications of rate hikes if their fixed mortgage loans are due to expire during this high.

But aside from home loans, have other loans been affected? Although lenders don’t have to respond to the cash rate or adjust their variable interest rates according to its movements, they often do.

Indeed, not long after the interest hikes were announced, banks and lenders increased their variable interest rates, which means higher monthly repayments for borrowers.

Fixed vs. Variable Rate Home Loan

Although we’ve briefly touched on this, let’s cover each loan type and the difference between them. This way, we can determine how and if the cash rate change will affect them.

On the one hand, if you’ve taken a fixed-rate loan, your lender will have settled with you on a fixed interest rate for a set time. That’s usually 1 to 5 years, but it can be as long as 10 years. For that time, your interest rate will remain the same (regardless of cash rate hikes and cuts).

On the other hand, if you’ve taken a variable rate loan, your bank or mortgage lender may increase or decrease your interest rate at any time.

Lenders and banks are guided in their decisions by the cash rate, cost of overseas funding, and the national and international economy. In other words, the more lending costs them, the more borrowing costs you. With the 2.60% cash rate, homeowners should expect higher home loan repayments.

Otherwise, fixed-rate repayments currently mean lower interest rates than the other type. However, once the fixed rate term expires, homeowners will have to face the variable rate loan market.

How Can I Reduce the Interest Paid?

If you’re after a way out, you can use your offset account if your home loan comes with one. It’s an everyday account linked to your home loan account in which you can deposit extra cash.

To calculate your net balance, lenders deduct the offset account balance from the loan account balance, using that value to calculate your loan interest. This way, you pay less interest on your mortgage loan. And although offset accounts cost more, they’re an investment, lessening the effect of interest rate hikes.

Another suggestion is making as many additional repayments with the current interest rate as possible. This way, you won’t suffer as much from future rate hikes.

Impact on Home Buyers

It’s clear that interest rate changes affect the real estate market. Homeowners will probably pay higher mortgage repayments due to the increased interest rate. This might lead them to consider refinancing and applying for another loan; however, the high-interest rates will make it difficult for them to afford one.

So, if you’re an investor, you might want to re-evaluate your investment, especially with home values decreasing, or reduce your expenses to be able to make your mortgage repayments. For instance, you can watch your credit card bill closely, unsubscribe to unnecessary services and subscriptions, and even sell some items. We also recommend consulting your mortgage broker or bank to look at your options.

Another hike in interest rate consequence is the drop in home prices. This was first seen in big cities, such as Melbourne (VIC) and Sydney (NSW), where the home value dropped by 1.6% and 1.1%, respectively, in July.

At any rate, the interest rate rise puts many Australians at risk of losing their properties, especially first-time home buyers and low-income loan holders if they’re not careful. For that reason, we advise you to stay vigilant on your extra repayments so that you’re able to manage them in your current financial situation.

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Downsizing Your Home [Pros & Cons Guide] https://www.buymelbourneapartments.com.au/pros-and-cons-of-downsizing-your-home/ Thu, 20 Oct 2022 21:23:13 +0000 https://www.buymelbourneapartments.com.au/?p=53037 There’s no one right time to downsize your Australian home. For some homeowners, it’s when the kids have flown the nest, and they’re left with too much space. For some others, it’s when they retire. Regardless of circumstances, the decision to downsize to a smaller home is never an easy one, no matter how common it is.

Why? Because while it’s an effective real estate decision, it comes with emotional, physical, and financial baggage. That’s why it’s essential to do your research and weigh up the following pros and cons of downsizing your home before making your final decision.

Reasons for Downsizing

While every situation is different, there are some common reasons why homeowners might choose to downsize. These include:

1. Retirement Downsizing

More than 50% of Australian seniors and retirees are now open to downsizing their homes. Mostly, this is for financial reasons. However, other reasons include health issues, a desire for more accessibility and amenities, or just wanting a simple home that suits their new lifestyle.

2. To Free Up Equity for Investments

For those who want to invest in property or other ventures, downsizing can be an effective way to free up equity since their home value will have increased since they purchased it. So, by selling it and buying a smaller property, they can use that extra equity to make an investment.

3. To Improve Savings

Similarly, the extra amount can be used to boost savings in an offset account. Additionally, there will be savings on costs like insurance, council rates, and maintenance.

4. For Accessibility and Amenities in the New Home

This is often the case for seniors looking for a home that suits their needs, such as an accessible floor plan, a single-level home, or one that’s easier to maintain.

5. To Raise Family in a Suitable Locality

For families, the decision is often about finding a suitable locality to raise their children. This might be a quaint neighbourhood with good schools or a secure area with low crime rates. The motive is usually to provide the best environment for their children.

6. To Be Closer to Family/Friends

This is common among seniors or retirees who want to be closer to their grandkids or people who have moved away from their hometown and want to move back.

Pro Tip

Downsizing can sound appealing, but you want to make sure that you’re doing it for the right reasons and not make any rapid decisions. Your home is likely your most expensive asset, so you don’t want to regret your decision later.

This is especially if you’re downsizing your current home for financial reasons. In this case, it’s best to consult with a financial adviser to see if downsizing is the best decision for your circumstances and ensure that you’re making the most of it if you proceed.

Advantages of Downsizing

There are multiple benefits of downsizing, including:

Increased Cash Flows

One of the most significant advantages of downsizing your home is the increased cash flows. This can come from reduced mortgage payments, lower property tax, lower utility bills like electricity and gas, and lower insurance costs.

There’s also the potential to make a profit from selling your previous home, which can be invested in different ways, such as topping up your superannuation fund or kids’ college fund.

Less Maintenance

Naturally, a smaller property will require less maintenance than a larger home. This means fewer repairs, painting, cleaning, and general maintenance tasks – giving you more time to relax or spend on other pursuits and more savings in the long run.

It also means that there’s less outdoor space to take care of, which can bring in extra money that would’ve otherwise been spent on landscaping and gardening since backyards and gardens are one of the most costly aspects of owning a home to maintain.

Decluttering

Most larger homes are family homes that have been lived in for years, with each family member accumulating their own belongings. When you’re downsizing, you’re forced to declutter – that is, get rid of items you no longer need or use. This can be a difficult and emotional process, but it’s necessary since the new home will have less space for storage.

This can be a liberating experience, and it also means that your new home will have a more elegant, sophisticated, and minimalistic appearance. Additionally, it’ll be easier to keep tidy and upkeep since there’s no room for anyone to hoard items or create clutter.

Locality

Another advantage of downsizing your home is that you can use the opportunity to make a locality change if you desire. If you’re sick of the traffic, noise, pollution, and the general hustle and bustle of the city, then downsizing is a great way to move to a more peaceful and rural area.

On the other hand, if you’re tired of living in the suburbs and want to be closer to the action, then you can use downsizing as an opportunity to move into the city where there are amenities like grocery stores, hospitals, schools, and parks within walking distance or nearby.

This is a great way to change your lifestyle and how you live – giving you a chance to start afresh somewhere new that better suits your needs and lifestyle.

Accessibility

Finally, downsizing your home can make it more accessible, especially if you’re downsizing to a single-storey dwelling. This is ideal for seniors or people with disabilities who may have difficulty climbing stairs or moving around a large home.

Even if you’re not downsizing for this reason, a smaller house can give you the opportunity to choose the home layout and design that best suits your needs. For example, you can choose an open-plan layout or flat layout if you don’t want stairs, or an outdoor design or multiple storeys if you want more living space.

Disadvantages of Downsizing 

Just as there are advantages to downsizing your home, there are downsides to be aware of, including:

Emotionally Challenging

For many people, their family home is filled with memories and emotional attachment. It can be difficult to let go of a property that’s been in the family for generations or where you’ve raised your children. And if you’re downsizing because of retirement or your kids going off to college, it can be an emotionally challenging time.

This emotional toll can be especially felt during the decluttering process as you’re forced to get rid of items that may have sentimental value because the new home can only accommodate so much. 

Finally, there’s the expected nostalgia when you move into a new home. It can be hard to adjust to the lifestyle change.

Financial Costs

Despite the financial benefits of downsizing, there are also some financial costs to take into account. These include:

Costs of Repairing & Staging Your Current Home for Sale

Before you can sell your home, you’ll need to make sure that it’s in good condition. This may involve repairs, renovations, or even just a fresh coat of paint. And if your home is particularly old, you may need to hire a professional stager to make it look its best.

Property Valuation Costs

When you’re ready to sell your home, you’ll need to have it valued by a professional property valuer. This cost is generally borne by the seller.

Real Estate Agent & Legal Fees

Once your home is valued and you’re ready to put it on the market, you’ll need to engage the services of a real estate agent. You’ll also need to factor in the legal fees associated with selling your property, which can include conveyancing fees, title transfer fees, and any other government charges.

Similarly, if you hire any additional independent appraisers or financial advisers, you’ll also need to account for their fees.

Stamp Duty

You’ll need to pay stamp duty on the property’s value when you purchase your new home. This is a tax levied by state and territory governments in Australia, and the amount payable will differ from state to state.

Furniture Removal

When it’s decluttering time, you may need to use the services of a professional furniture removalist to get rid of any unwanted items. This can be an expensive exercise.

Movers

When it comes time to move into your new home, you’ll need to consider the cost of hiring moving companies. These will depend on the size of your home and the distance to the new area you’re moving to, but they can add up.

Reduced Space

Downsizing means you’ll have less space to work with. Not only can this take the form of fewer rooms, less storage, and smaller living areas, but it can also mean compromising on activities that you generally enjoy. For example, if you love gardening, you may need to give up your garden or reduce the size of your plants and flower beds. 

Seek Further Advice

As you can see, a lot goes into the equation when you’re downsizing your home. From financial considerations to emotional trade-offs, there’s a lot to think about before deciding to downsize your home.

To avoid any regrets and make a level-headed decision, it is ideal to seek professional financial and real estate advice from people who are experienced in downsizing real estate. Remember, the decision to downsize is life-changing, so it’s essential to be as informed as possible before-hand.

That way, you can be sure that you’re making the right decision for your circumstances.

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Foreign Real Estate Investment in Australia https://www.buymelbourneapartments.com.au/foreign-investment-in-australian-property/ Thu, 06 Oct 2022 07:43:43 +0000 https://www.buymelbourneapartments.com.au/?p=53000 Taking advantage of foreign real estate investments is one of the best ways to build a diverse financial portfolio and create a funnel for passive income. The foreign real estate investment market is lucrative for many individuals and well worth looking into. 

Foreign property investment in Australia has proven popular and worthwhile. Between 2018 and 2019, foreign residential property purchases in Australia were valued at 7.5 billion dollars, so people looking to expand their assets and take advantage of foreign real estate investments can have wild success with Australian property. 

Investing in real estate can be daunting, especially when it comes to dealing with foreign properties in another country. We put together this article to help you understand foreign property investment in Australia. 

Keep reading to learn your eligibility for this kind of investment, how to invest in Australian properties, and if this investment is a wise decision for you financially. 

Can Foreigners Buy Property in Australia?

Typically, property purchases in Australia may be seen with permanent residents or citizens especially for owner-occupier settings, but foreigners also have the freedom to acquire residential real estate in Australia. 

A foreign person is identified as one not ordinarily resident in Australia, or a corporation with an individual not ordinarily resident in Australia, a trustee of a trust or a foreign government. 

An ordinarily resident person is one who has spent 200 or more days in the preceding year in Australia, and whose presence in Australia is not time-bound and time-imposed by law.

Temporary residents are a second type of foreign individual, who hold a temporary visa permitting them to stay in Australia for a continuous period of 12 months or more, or are on a bridging visa while having their permanent resident visa application in process.

Investment applications by these foreign investors are managed and decided by the Foreign Investment Review Board or FIRB. The FIRB is responsible for examining proposed investments subject to the Foreign Acquisitions and Takeovers Act of 1975. 

It also must advise the treasury portfolio ministers on said investment proposals, and ensure the foreign investors and the Australian government understand Australia’s Foreign Investment Policy and the Foreign Acquisitions and Takeovers Act. 

The Board enforces certain rules and regulations associated with foreign investments, especially concerning vacant land and new development projects. There is a 50% cap on foreign ownership and investors in new developments with an additional charge on leaving dwellings owned by foreign investors vacant, in order to give Australians a chance to purchase dwellings in these new dwellings and ensure access to housing. 

Foreigners are required to submit the appropriate applications and proof of finances to the FIRB and the Australian government. Both entities must approve the investment before any final transactions occur. 

The FIRB makes some exceptions to these rules, but only in cases where the foreign investor’s plan will likely benefit the country without impeding the success of the Australian citizens in the market. For example, they will allow a foreign investor to purchase a previously owned dwelling if they plan to redevelop the land or start a new business.  

FIRB Application

As mentioned, you cannot buy or invest in Australian real estate without the proper paperwork and an approved application. You can find a complete application checklist through the FIRB website, but below is a brief overview of what you’ll need before beginning the application process:

  • The application must provide a clear statement of significant actions, under the Foreign Acquisitions and Takeovers Act proposed to be taken. 
  • It must include details of the entity taking these actions. 
  • It must include details of the proposed transaction (commercial rationale, description of the acquirer’s intentions, relevant commercial deadlines, information about any sales process, and an implementation steps diagram. 
  • You must explain why the proposed transactions do not contradict Australia’s interests and Australia’s Foreign Investment Policy. 
  • You must provide ownership and control details of the entity, including country of origin, ownership percentage breakdown, and any associated foreign government investors, fund managers, or trusts. 
  • Provide structure diagrams with the direct and indirect holding entities and target groups. 
  • Include copies of last financial year’s audited financial statements (or most recent available). 
  • Details of an acquisition occurring because of a buy-back, unit redemption, or another form of capital reduction. 
  • Title details of all relevant land. 
  • A map of the relevant land with enough detail to identify the area. 
  • The value of interest in the Australian land in proportion to the target’s total assets. 
  • Consideration for all titles. 
  • Size of the Australian land in hectares. 
  • Details of the land’s current usage under FATA definitions. 
  • A proposed business plan explaining the primary activity, head operations, total funds, and expected number of employees. 
  • Information on patents, royalty, export franchises, and licensing arrangements. 
  • List of regulatory Australian approvals the new business will require. 
  • Post-implementation details including equity instruments and debt instruments if applicable. 
  • Details of any other type of relevant financing. 

This is simply a summary of the application checklist, so you can see how in-depth and thorough this application process is. Once completed, you can send the application directly to FIRB. 

Once the application is completed, submitted, and the application fee is paid, the treasurer has 30 days to make a decision. 

However, with a written letter, this period can be extended by another 90 days, and an interim order can extend it for another 90 days. 

So the longest the approval process can take is 210 days (about seven months). Once the treasurer makes a decision, you will be notified within 10 days. 

Application Fee

Below is a table showing the application fees as updated July 2022 per the property you plan to purchase. The exception concerning agricultural land is also below. 

Residential Land Value Fee for Single Action
Less than $75,000 $4,000
$1 million or less $13,200
$2 million or less $26,400
$3 million or less $52,800
$4 million or less $79,200
$5 million or less $105,600
Over $40 million $1,045,000 maximum fee

Other exemptions, meaning people or entities who do not need FIRB approval include:

  • Australian citizens
  • New Zealand citizens 
  • Permanent residents 
  • A developer with exemption certification 
  • An inheritor of a property
  • Someone awarded property by court order
  • Someone awarded property in a divorce settlement

New Vs. Established Dwellings

As a foreign property investor, If you want to purchase property in Australia, you will likely only be able to purchase new dwellings as an investment property. Some circumstances allow foreign investors to purchase established dwellings, but these are less common. This means they cannot easily buy a property with any previous owners or inhabitants unless it is for revamping into a new development and includes a valid exemption certificate. 

In addition, temporary residents are eligible to buy established dwellings [also with an exemption certificate], but will have to sell their investment as they leave the country, unless they become an Australian citizen or permanent resident. These rules are in place to ensure the Australian real estate economy stays secure and stable, and the housing industry remains available to Australians for investment. 

If you want to buy an established dwelling as a foreign investor, you will need special FIRB approval, which is only given for the following instances:

  • Acquiring a direct interest in an Australian entity or business
  • Starting a new business
  • Acquiring a direct interest in Australian land
  • Acquiring a legal or equitable interest in a tenement
  • Plan to demolish and redevelop an established dwelling
  • Living in the established dwelling during the ownership

The idea behind these rules is that Australia wants non-resident foreign investors building new properties which further helps to create more jobs and improve the economy. Through stamp duties and taxes, the state and federal governments are also able to generate revenue to invest back into the economy.

Why Invest In Australian Property as an Overseas buyer?

The enticing real estate market of Australia can be convincing enough as a reason to invest in Australian properties. The most prominent reason is the success and stability of the Australian economy, especially when compared to other international economies like that of the US and the UK. . 

Overall, the Australian housing market shows impressive stability and continued growth, making it a prime market for investing. Along with helpful government incentives and easy financing, it’s clear why so many overseas investors buy property in Australia. 

The sections below dives into the many advantages of investing in the Australian housing market.

Stability

While the US and many other real estate markets can sometimes be unpredictable, the Australian market has had relatively stable property prices over the past years. The market has shown a consistent 7.25% increase in property values year after year. 

Unlike other countries, the Australian housing market fared relatively well throughout COVID, and is expected to bounce back gradually. The Australian housing market was also safe from the housing crisis of 2007 to 2008, which practically decimated the US housing market. But because of Australia’s global positioning, consistent population, and healthy economy, they have not seen any such crises. 

The US and other countries have volatile housing markets, but Australia seems to operate separately from this chaos. Foreign investors can reap the benefits of this high-functioning economy without moving to Australia. 

Future Growth Potential

The stability of the Australian real estate market is not the only advantage. The real estate market in Australia is expected to grow by 4.2% in 2022 and 2.5% in 2023

As properties grow in value, you get more capital gains minus any capital gains tax you have to pay off on the property value. So the Australian real estate market is an excellent opportunity for making money. 

To give you an idea of the growth potential of these markets, check out the expected growth in popular spots in Australia. These forecasts are based on current property values and previous property values. 

  • Melbourne, Victoria: Melbourne property values should increase by 8% over the next 3-5 years, making this an opportune moment in the Melbourne market. The Victoria housing market is slowing down, but as prices drop, properties become more affordable, making this the perfect time to buy and benefit from the upswing. 
  • Sydney, New South Wales: Property values in Sydney should continue to grow by 7.4% annually for the next 5-10 years. Experts predict the NSW market will continue to grow in the short term, seeing high jumps over the next few years. 
  • Brisbane, Queensland: Brisbane might be the best place to invest right now, as dwelling values have gone up by 10.6% annually in recent years, and this trend should continue upward. 

Government Incentives

Along with the promising housing market and lucrative real estate opportunities in Australia, foreign investors can also benefit from government incentive programs. These programs are mostly tax incentives, meaning you can save money when paying income or property taxes on your Australian property or business. 

Below is an overview of some of the best government incentives foreign investors can take advantage of. These incentives are regulated by the ATO (Australian Taxation Office), but some are easy to qualify for. 

Early-stage Investment Incentives

This tax concession is 20% of the investment made with a cap of $200k. This incentive is ideal for angel investors who help get businesses up and running in Australia. This tax offset commonly goes hand in hand with a home loan scheme. 

Research and Development Tax Incentives

The R&D tax incentive promotes more innovative projects in Australia. Any activities and businesses related to research and development can take advantage of this government incentive with income tax offsets of 43.5% or 38.5%. This tax concession is partly self-regulated, making it one of the easiest to take advantage of and save on corporate taxes. 

Foreign Investment Policy in Australia: Income Tax Offsets

This government incentive helps foreign investors avoid double taxation on income and properties, making it easier for overseas investors to make money from their Australian real estate. There is a limit to this tax offset, but it can generally cover all double taxation. 

Conservation Incentives

The Australian government created this program that offers a buyer grant to investors that contribute or partake in conservation projects to protect and maintain Australia’s nature. The minimum on this buyer grant is $5,000 but can be more, depending on the property value and the degree of conservation efforts. 

Easy Investment & Financing

In Australia, interest rates are still at a considerably low level compared to other countries. Australian interest rates have been as low as 1.85%, while interest rates in the US and European countries, like England, France, and Spain, have interest rates closer to 6%. 

Along with these exceptional interest rates on property loans, financing is also easy to obtain, as lenders lend at lower rates and do not expect investors to default as much as they do in other countries. 

Financing is easier if foreign investors express interest in a residential property versus a vacant lot of commercial property. Mortgages on residential homes, which must be new dwellings, can have reasonable rates compared to the rest of the world. 

Long-term Gains & Security

Property investment is one of the more stable and secure investment options available today. Stocks, bonds, and business investments can be less predictable and more chaotic, suddenly plummeting from various global events or rising unexpectedly. But real estate tends to be more stable and predictable yielding more long term gains as a secure investment option.

Simpler Investment Process 

Another benefit of investing in the Australian real estate market is the simplicity of the legal system. 

Compared with the rules for foreign investment in other countries, Australia will welcome you with open arms. The Australian Government, Australian Taxation Office [ATO], and FIRB all see the positives of allowing foreign buyers in the property market and are lenient in their foreign investment approval if all investment rules and conditions are met.

In addition, a similar legal system is present in places like the UK [based on Commonwealth Common Law], Singapore, China [Hong Kong], and Switzerland making the systems and processes easier to understand and operate in.

Get Started

Overseas investors buying property in Australia find the market to be promising and lucrative so if you’re considering foreign property investment in Australia, consider it a sound decision as the market continues to grow and the government encourages expansion. 

Once FIRB and the treasurer approve your application, it’s time to find the ideal real estate agent to find you the best property. Foreign investors can easily reach out to Australian real estate agents for any confusion and clarity required as they navigate the foreign investment procedures and become successful investors in the Australian housing market.

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Impact of Rising Interest Rates on Property Investments https://www.buymelbourneapartments.com.au/interest-rate-and-property-investment/ Thu, 06 Oct 2022 07:27:05 +0000 https://www.buymelbourneapartments.com.au/?p=52997 The Reserve Bank of Australia (RBA) has implemented interest rate increases for five consecutive months to curb inflation, which has spiked notably with the passing of the global pandemic and accompanying lockdowns. 

The RBA’s most recent increase was in September of 2022, when it raised cash rates by a further .5 percentage points, bringing interest rates to 2.35 percent. 

While the increase was felt across the economy, homeowners with mortgages and property market investors got the bulk of the impact. 

More to Come

More ominously, the consensus is that this rate increase is not the last of this year. Higher rates will stifle inflationary growth and dampen enthusiasm for taking out loans to buy a house. For investors, it means property values will likely start to decrease. 

While that has an upside for those looking to buy in the future, those who bought in the recent past are now likely to see a decrease in the value of their investment. That decrease in value comes as loan repayment costs increase and since Australians know this isn’t the end of it, many home buyers and investors are taking a step back and reconsidering their options.

Interest Rates vs. Home Prices

Reduced housing prices are great news for those contemplating getting into property investment that does not have to go through lenders to secure funding for the property. The flip side to that equation is more expensive loans.

Another group that may not like the new market, even with lower home prices, is those shopping for a home that needs bank funding. Changes in the RBA cash rate influence lender’s bank deposit rates, which help determine interest rates for home loans. The recent increases to maintain banks’ profitability rates have made loans significantly more expensive.

The more expensive loans have made home ownership unaffordable for many people looking to buy a home or invest in property. The hardest hit will be (and are) first home buyers because their overall borrowing capacity is limited to begin with in most cases. Home ownership may be put on hold for that market segment until the inflation and economic pressures subside.

If, for example, after the mortgage and living expenses are covered, a couple only has a few hundred for savings or spending, stacking on perhaps an additional $70 a month might be a deal breaker. It might mean reconsidering if ownership is a legitimate goal. It also might make repayment less of an assured outcome.

Necessary Measures

The increase in the cash rate was, however, necessary to keep spending in check. Significant inflation rates of 6.1% and expected upward are the result of restarting the post-pandemic economy, lingering supply chain issues created by the pandemic, and the impact of the Russia-Ukraine war. 

Interest rate rises, among other changes in the economic situation, has increased the cost of loans while lowering median prices, according to CoreLogic’s recent data analysis. The median property prices for key cities like Sydney, Melbourne, and Brisbane have reduced as the buyer market has begun to dry up, which has lowered prices even further. 

Impact on Property Investments

Higher interest rates mean mortgage repayments have become significantly more expensive. While major commercial property investors might not be impacted as quickly by higher loan repayments, the overall impact of more expensive loans means that commercial and residential borrowers have less borrowing capacity. 

These added expenses are prompting many borrowers to examine their investment strategy and alter it where they can. The only viable option is to reduce their cost of living to make mortgage payments more affordable.

By trimming expenses to make loan payments more affordable, ownership is still a possibility. Borrowers may also have to accept that property prices of what they end up owning will be significantly less than what they went into debt to buy.

Potential investors will be looking at more expensive home loans and may do well to focus on making careful real estate investments on smaller properties and high-density housing such as apartments, townhouses or units along with the rise of mortgage rates in Australia.

Acting with Prudence

The five consecutive monthly increases in the cash rate by RBA are not the end yet and are expected to continue further in the year.

The good news however, is that the economy and housing industry is still relatively stable compared to many other countries, even with consumers facing inflationary pressure not seen in a long time. Another upside is unemployment rates being at a record low, meaning there are sufficient jobs available for Australians, making loan repayment more likely, although it may come with compromises on personal spending.

For property investors, the best housing market approach is strategically investing in smaller properties with lower values. Doing so will mean lower mortgage loans, making ownership possible, even for first-home buyers. Investors should, however, actively monitor interest rates and inflation for the time to come to proactively make any changes to their future investment decisions.

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Government Incentives for First Home Buyers https://www.buymelbourneapartments.com.au/claim-first-home-buyers-assistance-australia/ Tue, 27 Sep 2022 11:18:12 +0000 https://www.buymelbourneapartments.com.au/?p=52768 For many people, the thought of buying their first home is both exciting and unnerving. It is usually the most significant investment of their life, brought about only after years of extensive saving, but many Australians aren’t aware of the incentives for doing so. In Australia, numerous grants and schemes are available, both national and regional, for first-time property owners ranging from large subsidies to minor concessions.

Many of these are in the form of grants (not repaid) but can also come in the form of a loan and can apply to most forms of property including apartments, townhouses, and vacant lots with the intent to build. All incentives come with strict eligibility criteria, rules, guidelines and application processes that should be understood clearly before applying.

Here you will find details of most popular first home buyer incentives provided by the Australian and state governments and how you can be eligible to make the most out of them.

Types of Government Grants & Schemes 

National grants and schemes generally differ from state-only offered schemes. Some schemes and grants are advanced nationally but vary slightly from state to state. It’s recommended for eligible first home buyers to visit their respective state websites to identify the specific process and guidelines for their location.

National Incentives

The Australian Federal Government has taken many steps to ensure that citizens are receiving fair opportunities to purchase residential property. Nationwide incentives focus on getting people financially stable while saving for a first property, which means helping with savings, loans, and eliminating lenders mortgage insurance. These schemes are the most helpful, which is why they are offered on a national level for most Australians to gain from.

First Home Owners Grant (FHOG)

The first home owners grant (FHOG) is the most widely available and used national scheme, mainly due to its simplicity and the amount offered. The FHOG is a one-time grant offered to first-time home buyers that are purchasing a newly built home and can be used for buying an apartment, townhouse, house, unit or similar. The amount offered is dependent on the value of the property being purchased and the max grant offered differs in each state, ranging from $10,000 to $30,000.

First Home Loan Deposit Scheme

The first home loan deposit scheme is an initiative that aims to lower the barrier of entry for first-time home owners. Saving up enough money for the deposit on a home is usually the most significant barrier to home ownership, which this scheme aims to assist with. The National Housing Finance and Investment Corporation act as the guarantor for up to 15% of your deposit, allowing you to purchase a home with just a 5% deposit and without need for lenders’ mortgage insurance.

First Home Super Saver Scheme

This initiative allows prospective first-time home buyers to save for their first home using their super fund, reducing the amount of taxes which further helps to save money. Through this scheme, a portion of your retirement savings, or super fund, can be contributed towards owning a home.

The goal is to assist with the deposit on a home, similar to the First Home Deposit Scheme. Saving the money in one’s super savings account makes less of your income taxable, making a significant difference in the amount of savings generated. 


First-time home buyers are allowed to use up to $50,000 of their super fund for the deposit on their home.

Family Home Guarantee [Regardless of First Home Buyer Status]

The Family Home Guarantee is a federal scheme that lets single parents buy a home with only a 2% deposit and no need for lenders’ mortgage insurance. The goal of the scheme is to help families that have separated parents by helping single parents afford a family home. This scheme is available to all single parents, even if they are not a first-time buyer.

Stamp Duty / Transfer Duty Concession [Regardless of First Home Buyer Status]

Stamp duties are the one-time fee that new homeowners must pay for their property. There are different levels of stamp duty concessions and exemptions available.

Firstly, each territory has different transfer duties and therefore different initiatives that help with those fees. Even in the same state, home buyers can be subjected to varying concessions based on their income, marital status, prospective property value, etc.

State Specific Incentives

Each state offers grants and schemes that are funded and run through the local government. The FHOG grant is listed here because although it’s offered nationwide, it also varies by state and should not be treated as one singular national incentive.

Other than the FHOG grant, each territory has limited assistance programs that are only offered in their region. Some of these incentives are used to invigorate the local economy. Transfer fees also have varying concessions and exemptions by the state, so those are listed here.

Victoria

In addition to the First Home Owners Grant, Victoria offers Stamp Duty exemptions and concessions for eligible citizens. Additionally, the HomesVic is a shared equity scheme that used to run for home buyers in Victoria but is not accepting new applications.

First Home Owners Grant (FHOG):

  • Up to a $10,000 Grant
  • First-Time Buyers
  • New Homes Only

Varying Stamp/Transfer Duty Exemptions and Concessions

  • The Victorian Duty Exemptions and Concessions include three different types of concessions including the first home buyer duty exemption and concession, first-home buyer duty reduction and the principal place of residence duty concession, all three of which do not differentiate between a new or established home.

New South Wales

New South Wales (NSW) offers two main incentives – the First Home Owners Grant and the First Home Buyer Assistance Scheme.

First Home Owners Grant (FHOG)

  • Up to a $10,000 Grant
  • First-Time Buyers
  • New Homes Only

First Home Buyer Assistance Scheme (FHBAS):

  • Stamp/Transfer Duty Exemptions
  • First-Time Buyer
  • New or Existing Homes, including Vacant Land

Queensland

Similar to Victoria, Queensland (QLD) offers various Stamp Duty exemptions and concessions.

First Home Owners Grant (FHOG):

  • Up to a $15,000 Grant
  • First-Time Buyers
  • New Homes Only

Varying Stamp/Transfer Duty Exemptions and Concessions

  • View Queensland’s Transfer Duty Exemptions and Concessions, where the first home owner concession applies to homes valued under $550,000 on which around $8,750 can be collected as a rebate.

Western Australia

Western Australia (WA) offers the Home Buyers Assistance Account, a small grant for first-time buyers, and the First Home Owners Grant.

First Home Owners Grant (FHOG):

  • Up to a $10,000 Grant
  • First-Time Buyers
  • New Homes Only
  • Includes Transfer Rate Concession

Home Buyers Assistance Account (HBAA):

  • Up to a $2,000 Grant
  • First-Time Buyers
  • New or Existing Homes, including Vacant Land

South Australia

South Australia (SA) has no incentives other than the First Home Owners Grant, however, South Australians can enjoy a higher grant from the Australian Federal Government.

First Home Owners Grant (FHOG):

  • Up to a $15,000 Grant
  • First-Time Buyers
  • New Homes Only

Tasmania

Tasmanians have an increased First Home Owners Grant and access to the Tasmanian HomeBuilder Grant.

First Home Owners Grant (FHOG): 

  • Up to a $30,000 Grant
  • First-Time Buyers
  • New Homes Only

Tasmanian HomeB​​uilder Grant:

  • Up to a $20,000 Grant
  • New Homes Only

Australian Capital Territory

The Australian Capital Territory is exempt from the First Home Owners Grant. However, there are still incentives for first-time homeowners in the ACT.

  • No First Home Owners Grant
  • All First Home Buyers Exempt from Stamp Duty

Who Is Eligible for First Homeowners Grants and Incentives?

The specific numbers can vary slightly in different territories but some criteria are the same amongst all schemes. The eligibility requirements to be met for applicants include:

  • 18 years of age or older
  • Australian citizen or permanent resident
  • Buying as a residential property – it cannot be bought as an investment property
  • Have not previously owned a home in Australia
  • Be a person [companies and corporations do not qualify]
  • Move into the house within 12 months of construction or purchase

Additionally, the following factors might determine the amount received:

  • The purchase price or value of the property
  • The state in which the property is located

It is worth noting that the FHOG is not means tested, simply meaning that it does not consider an individual’s income.  

How to Apply for a First Home Owners’ Grant?

The individual application and process can vary depending on the scheme, but most often, an approved agent or the State Revenue Office will process them [the approved agent can also fill out the application form on your behalf]. For most grants and schemes there are different levels of assistance offered based on various factors at play, including but not limited to yearly income, marital status, and the eventual property value. It is vital to double-check the specific scheme offered by your respective state.

Applying for the First Home Owners Grant

The FHOG is the most common grant for first-time property buyers, but less than 20% of submitted applications aren’t lodged correctly or are missing documents. To ensure that your documents are in order on the first application, make sure to have:

  • Contract of Sale (Must be Certified)
  • Building Permit or Domestic Building Insurance Certificate
  • Certificate of Occupancy
  • Vendor Statement Confirming the Property has never been occupied
  • Verified Australian Identification (Birth Certificate, Citizenship Certificate, Passport)
  • Married, Divorced, Widowed, etc. Documentation (Must be Certified)

Application Outcome 

There tends to be confusion about when the FHOG grant gets paid out and can vary based on the type of property ownership [new home purchase, contracting to build a home, or an owner builder] and can be paid out to individuals on either the time of settlement, the time of first progressive payment, or when the certificate of occupancy is received [once the home buyers move into their newly purchased home].

It is recommended to reach out to approved agents [e.g. banks or credit unions] for lodgement and to only apply to the State Office if there is no agent available to apply on your behalf. Lodging directly with the State Revenue Office could mean that the money is received 1-2 weeks later than it would be if applied under an approved agent, but it will still process at the date of occupation. Occupants must maintain occupancy for at least 12 months.

If your first home buyer application is rejected but you have reason to believe it should be accepted it is best to write to your respective state government to review the application again with any updated pieces of information.

A Step Closer to Home

Purchasing a home is a daunting task, but especially so when it is your first time. Trying to sort through all the different processes and regulations makes it easy to get overwhelmed. First-time home buyers deserve all the help they can get while exploring options for first-home buyer benefits. If this guide doesn’t answer every question for your specific case, your real estate agent, or your local and federal government offices can assist with any further queries you may have. 

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