Are you ready to make your move?

The Government introduced the First Home-Owner Grant (FHOG) in July 2000. The idea was to offset the effect of Goods & Services Tax (GST) on property purchases. Each state and territory administered the grants under their own legislation, but the principle remains the same nationally – allowing eligible first home buyers to receive a one-off grant to use towards their property.

Back then, the hint of property markets softening meant there was an emerging segment of first home buyers in the affordable Australian Property Markets. Our first home buyers guide continues to help ADF members take advantage of these opportunities to create future financial security.

If you’re thinking of investing in property, make sure you take a look at Capital Properties Investor Tool with up-to-date insights on capital city residential property market performance: The Australia Property Market Report.

Or come along and learn about the first home buyers guide and much more at a free Capital Properties Discovery Session.

On the go? Here’s 30 seconds of take outs:

  • Government Grants have made buying a place of residence very attractive.
  • We’ll tell you what you need to get started with our first home buyers guide, including how much deposit you’ll need for your property, why you need pre-approval and how to choose the right property.
  • Our 7-step education process is the most efficient way for you to acquire the knowledge and confidence to help you grow your financial and personal wealth.

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2020 sucked right?

Nope actually. Not for everyone. In fact, being a Defence Force First Home Buyer in 2020 had plenty of benefits! Historically, it’s often been better for Defence Force first home buyers to consider the cost-benefit of investing rather than purchasing a principal place of residence. We discussed this in more depth in the blog: Should I buy a [PPR] house to live in, or invest in?

However, in 2020, the new Government grants changed that. In fact, we advised many of our Clients that taking advantage of the grants and purchasing a property outside of their postal locality in some of the more affordable property markets was a good high-growth strategy.

Naturally, there are some eligibility criteria. For example, to fulfil the First Home-Owners Grant residency requirements you must live in the property for a required time period. Each state and territory have different requirements, so it’s best to speak to one of our Capital Properties team members to get help deciphering these.

So, what about today’s property market? Do you know what home-buying grants, if any, you’re entitled to?

First Home Buyer Guide

1. Research your entitlements;

          a. Defence Force Entitlements. Knowledge is power. And it’s our mission to share that with you. This previous blog post will walk you through your entitlements.

          b. Government Entitlements. Let’s start with the First Home-Owners Grant (FHOG). Each state and territory have different grant amounts, so check the specific office of state revenue (or Treasury) webpage for the correct details, or get in touch with us directly and we’ll sort you out.

Then there’s the First Home Guarantee (FHBG), and the Regional First Home Buyer Guarantee (RFHBG) which are also known as the ‘Five Percent Deposit Schemes’. There was also the HomeBuilder Grant that was available up until 14 April 2021 – although if the application had been lodged by that date, then supporting documentation can still be submitted to the relevant State or Territory Revenue Office until 30 April 2023.

2. Work out what you need to get started;

          a. Minimum deposit. A first home buyer just needs five percent of the value of the property in genuine savings to use towards the purchase price of a property. (This amount was correct at the time of writing this blog). You will be required to show funds to complete the purchase.

There’s some flexibility around Owner-Occupier finance and lending, so many of the major banks will have options for smaller deposits. Our finance broker can help you work out the amount you’ll need in your specific situation. Contact us here.

          b. Still saving your deposit? Did you know that the Australian Government actively encourages younger generations to enter the property market? One of the ways they did this was to introduce a scheme called The First Home Super Saver Scheme (FHSS). This Scheme is intended to help Australians boost their savings for a first home by allowing them to build a deposit inside their superannuation – effectively giving them a tax cut. We can help you learn about this with our first home buyers guide and share some more tips to secure that deposit

          c. Minimum income. First home buyers must show a good capacity to service the home loan. If you’re unsure of your ability to do this, take a look at our blog post on debt-to-service ratio or debt-servicing: ‘The One Property After the Other Myth’.  Alternatively, just get in touch and our finance broker will help you work out the amount you’ll need for your individual situation.

3. Work your borrowing capacity

This is finance-talk for telling you to work out what you can afford to buy, or what your property budget is. Your borrowing capacity will be made up of your current assets and liabilities. You can use our net asset position calculator found in our Property Investment Tools and Apps page.  

Again, this is easier if you’ve got someone who knows what they’re doing. Contact us and a finance broker will be in touch to work out the amount that you’ll need for your property purchase.

4. Seek finance pre-approval

Vendors (‘sellers’) love first home buyers that are in a finance-ready situation. If you have pre-approval, you’re in the best possible position to make a purchase quickly. Therefore, your advantage as a first home buyer means that you can negotiate on price and settle faster. This is a hugely motivating factor to a vendor/seller.

5. Research your property purchase

Purchasing a house that you’re intending to live in will affect your decision-making process. It’s natural that thinking of the house as a home will create an emotional tug. But the reality is, any house purchase is also an investment. We strongly recommend that you approach this in the same way you would any other investment, i.e. do your due diligence! Here are your ‘soldiers five’ in researching;

  1. Economic factors. Check out this blog we did on economic factors that impact the property market: Which national economic indicators sway the property market. And for a current market overview, read our Australian Property Market Report.
  2. Property statistics. Make switched-on investment decisions by using our 8 property selection criteria: Switched-on Strategy Series.

Property Demographics. Have you done your research on the demographic in the suburb you’re looking to purchase in? Here’s what to look for: Hey property investor have you id’d?

6. Research your service providers

It’s best to work with someone who understands the unique set of problems that comes with being a Defence Force first home buyer. You’ll need a unique set of solutions, so you need a professional who understands both you and the process.  For example, do any of these sound like you?

  1. You spend a lot of time away from home, you’re time poor and often have limited access to the internet whilst deployed.
  2. You may have limited resources, a lack of knowledge and don’t know who to trust.

Even though you’ve saved money, you may be concerned about making a mistake and aren’t sure what to do with it.

We address these problems, and more, through our client 7 Step property investment process. The process takes you through the entire investment process including our Discovery and Strategy sessions  in a time-effective manner (over 2 – 4 weeks).

Let our experts help you on your way. Get in touch now.