Federal Budget Policies Updates

Thanks to COVID-19, a lot is going on in trying to stimulate our economy in amongst a very competitive lending market, e.g. record low rates. Houses prices are either going up or down depending where you are in the country with no guarantee either way for the future.

It is presently a great time to consider refinancing, to lock in some bargain rates or to purchase to take advantage of some of the Federal or local Government buyer assistance schemes. Never has there been so much going on at any one time.

If you would like to seek advise, to sort out what is possible and what is not, do not hesitate to call myself for a free chat. Now for some budget relevant topics.

Incentives for First Home Buyers.

Normally a home buyer needs to save a deposit totaling 20 percent of the purchase price (or take out lenders mortgage insurance). As part of the Federal Budget, a second round of 10,000 places (In this 20/21 financial year) have been released for first home buyers where you can buy with as little as a five percent deposit. This offer is different to the first offer as now it is tailored to people who are either building or buying new. (See the 6/10/2020 email out to get more information about this scheme)

If you are considering applying for the First Home Loan Deposit Scheme, don’t wait! I can help you understand if you’re eligible, navigate through the process and find the most competitive home loan rate for your situation. We’ll need to get in quick, places are limited.

Income tax cuts happening now not later.

This financial year, some 11 million individuals will benefit from income tax cuts being brought forward. For those earning between $48,000 and $90,000, the relief will be $1,080. Those earning between $90,000 and $120,000 will receive between $1,080 and $2,430 in tax relief and anyone with incomes above $120,000 will end up with the maximum $2,430.

Get those Surplus super fees under control.

When we change jobs, we often automatically end up with a new super account. As a result, tonnes of us have multiple accounts (6 million additional accounts, in fact!) and are possibly paying extra fees. The total of superannuation fees amount to more than our gas and electricity bills combined. From next financial year, if you change employers your super account will in most cases follow you.

For Businesses - Full tax deductions for assets.

In Australia (except the top 1% of businesses) - will be able to deduct the full cost of new capital assets purchased after budget night (6 October 2020) as long as the asset is first used in the business by 30 June 2022. There is no dollar limit on the asset’s capital value, which makes this proposal very appealing to many businesses. Small and medium businesses with annual aggregated turnover of less than $50 million will also be able to apply "full expensing" to second-hand assets.

First Home Buyers – First Home Loan Deposit Scheme (FHLDS)

Only in the last few days the Federal Government have made available another 10,000 places. This is in addition to the first 10,000 places that were made available for this financial year on the 1/7/2020, with this initial offer having been all taken up.

The key advantage of this scheme being that you will not have to pay Lenders Mortgage Insurance with you only needing a 5% deposit.

There are differences to the conditions attached to the previous 10,000 places offered. These are as follows:

·It is for applicants who are either building or buying new properties, previously it was for all property purchases

·The maximum purchase price has been increased to:

- NSW – Capital City/ Reginal Centres ($950,000) & rest of state ($600,000)

- ACT – ($600,000, previously $500,000)

- Varies with increases to all other states and territories

This scheme is open from the 6/10/2020 to 30/6/2021, or until all 10,000 places are taken up.

There are currently 27 lenders offering this scheme, so best to check with LendSure Finance to find out who these lenders are and which lender is a good fit with your personal and financial profile.

Conditions apply and you will still need 5% deposit. Also check with the different State and Territories as they all also have schemes which can either cancel out or reduce stamp duty costs.

To see what the Federal Government has to say about the new (FHLDS) CLICK HERE

Home Builders Scheme – For all applicants, not just First Home Buyers

Here a grant of $25,000 is given by the Federal Government. This initiative started on the 4/ 6/ 2020 with contracts having to be signed before the 31/12/2020. You have until the 31/10/2022 to have the certificate of title registered. From the signing of the contract you have 3 months to commence building. Some of the main conditions are as follows:

·Is available for land and build and off-the-plan purchases, up-to a contract price of not greater than $750,000.

·Is available for major renovations between $150,000 and $750,000.

·After completion of construction, you must live in it for a minimum of 6 months

·Available to Australian citizens only

Note: There can be slight differences to what is advertised by Federal Government and how it is applied here in the ACT. To find out further information about the grant as applied in the ACT, CLICK HERE

Whether you are a First Home Buyer, or it is not your first, if doing a land and build, buying new or purchasing an existing property, anywhere in Australia, check with Financial Solutions to find out what government assistance can be offered to you.

A broker who works for you.

Even though it can sound like a lot of noise, the release of the Australian budget is a good time to reflect and ponder your own budget and goals. I’m here to help - whatever you might need. Simply call or email and let’s discuss how I can support you.