conveyancing

BUYING IN QLD WITH THE NEW FIRST HOME LOAN DEPOSIT SCHEME

THE First Home Loan Deposit Scheme IN QUEENSLAND

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The First Home Loan Deposit Scheme (‘FHLDS’) was announced during the recent Federal election.

The new rules will provide that first-time buyers need only save a 5% deposit when they purchase a new property. Currently most banks and financiers require a 20% deposit before they will consider providing finance for the purchase of a residential property.

The FHLDS will guarantee loans through the National Housing Finance and Investment Corporation. 

Not only will it mean that First Home Buyers do not have to save more for the deposit but they may avoid having to pay for mortgage insurance which is often thousands of dollars.

The new policy is due to come into effect from 1 January 2020.

To be eligible individuals cannot be earning more than $125,000 per year or for couples, more than $200,000 per year.

However, the scheme is only available for the first 10,000 first home buyers.

FIRST HOME SUPER SAVER SCHEME

The FHSS (First Home Super Saver Scheme) scheme was introduced by the Australian Government in the Federal – Budget 2017-18 to reduce pressure on housing affordability.

From 1 July 2017 you may make voluntary contributions into your superannuation fund to save for your first home. 

After 1 July 2018 you can apply for the release of your voluntary contributions along with any earnings from the investment of these contributions to go towards the purchase price of your first home.

To be eligible to make use of the FHSS scheme it is required for you to live in the property that you purchase for at least 6 months immediately within the first 12 months after settlement. The house or unit cannot be an investment property that you plan to rent out.

If you plan to use the scheme then you need to apply for and receive confirmation before you sign a contract to buy. It also must be your first home.

Once you receive consent to apply the scheme you can then sign your contract and afterwards apply for release of your FHSS amounts. However be it’s important to know that it may take between 15 and 25 business days to receive the FHSS funds. Therefore, it is essential that before you sign your contract that you: have confirmation and that you make sure that you have a lengthy settlement date if you need the FHSS funds to pay to the Seller on settlement day. 

You have 12 months from the date you make a valid request for release of your FHSS amounts, to do one of the following:

  • sign a contract to purchase or construct your home – and give notice within 28 days that you have signed the contract

  • recontribute the assessable FHSS amount (less tax withheld) into your super fund – and you must give notice within 12 months of the release request date that you have recontributed

If you don't give notice that you have done one of the above or you choose to keep the FHSS money, you will be subject to the FHSS tax. This is a flat tax equal to 20% of your assessable FHSS released amounts. This may not be the same as the total amount released.

If you have any questions regarding your requirements for the Australian Taxation Office and the First Home Loan Deposit Scheme in Queensland contact the Horrocks Solicitors team today at 07 3013 2300

If you have any questions regarding your requirements for the Australian Taxation Office and the First Home Loan Deposit Scheme in Queensland contact the Horrocks Solicitors team today at 07 3013 2300

Who is eligible

You can start making super contributions from any age. However, you must be 18 years old or older to request a determination or a release of amounts under the FHSS scheme.

Also, you must have:

  • never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship)

  • not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.

Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.

Financial Hardship Provision

You may still be eligible even if you have previously owned property in Australia, if it is determined that you have suffered a financial hardship that results in a loss of ownership of your property interests. The types of events that could result in the loss of property interests include:

  • bankruptcy

  • divorce, separation from a de-facto partner, or a relationship breakdown

  • loss of employment

  • illness

  • being affected by a natural disaster

  • being eligible for early access to superannuation.

How to apply for financial hardship

If you want to be considered under the financial hardship provision you can apply with either:

ATO online using your myGov account linked to the Australian Tax Office

or by completing a First Home Super Saver scheme Hardship Application Form.

APPLYING FOR A FIRST HOME OWNER'S GRANT IN QUEENSLAND

HOW TO APPLY FOR A FIRST HOME OWNER'S GRANT IN QUEENSLAND

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The Queensland Government offers a grant to first home buyers to purchase their first home sooner.

The grant may be from $15,000.00 to $20,000.00 however is only available if you are buying or building a new home. This home must be your first home purchase with a sale price that is less than $750,000.00.

In addition:

  • You must be at least 18 years of age.

  • You must be an Australian citizen or permanent resident (or applying with someone that is)

You or your spouse must not have previously owned property in Australia that you/they lived in.

  • You can buy or build a new house, unit or townhouse

  • It can be off the plan or you can choose to build yourself

  • You must be buying or building a brand new home

  • The value of the home including the land must be less than $750,000.

  • You must move into the new home as your principal place of residence within 1 year of the completed transaction and live there continuously for 6 months.

You can click on the following site to check your eligibility for the First Home Owners Grant.

FIRST HOME OWNERS GRANT ELIGIBILITY

While this guide will explain applying for a first home owner grant, and your obligations after receiving it

APPLICATION GUIDE

BUYING PROPERTY IN A BRISBANE FLOOD ZONE

BUYING IN A POSSIBLE FLOOD ZONE IN BRISBANE

The Brisbane river has a history of significant flooding beyond it’s brown riverbanks. Many potential Buyers of real estate in Queensland will ask Horrocks Solicitors what they need to know about buying a house in a flood zone in Brisbane.

As Brisbane sits on flood plains the possibility of a future flooding is high; especially when you take into account that the highest recorded floods occurred as recently as 2011 and 1974, in addition to earlier floods throughout the last century.

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If you are concerned about the possibility of buying a property in a flood zone. You can make the following inquiries before you enter into a contract:

1. Flood Awareness Map / Brisbane City Council

The information in this map is sourced via flood studies conducted by the Brisbane City Council.

Click on the Flood Awareness Map and follow the links, it is important you read and

understand the conditions of use. This Map will give you a percentage likelihood of flooding

including details of the 1974 and 2011 floods.

>>> FLOOD AWARENESS MAP

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2. FloodWise Property Reports

FloodWise Property Reports show the risk and type of flooding at a specific property including estimated flood levels.

>>> FLOODWISE PROPERTY REPORTS

5 QUESTIONS TO ASK BEFORE BUYING A HOUSE

Before you take the leap and make what may become one the biggest purchases of your life there are a few pertinent questions to consider when buying a house.

Here are 5 important points you need to know before you sign a new house and land contract in Queensland:

5 QUESTIONS TO ASK BEFORE BUYING A HOUSE

  1. Do I have sufficient funds to complete the purchase and do I need to make the contract subject to finance approval?

  2. What are the legal costs for conveying the property into my name?

  3. What transfer duty and Titles Office registration fees will I have to pay?

  4. How old is the house and other improvements on the property; have they been approved and inspected by the local Council?

  5. Do I need to add any special conditions to the contract? for example: settlement subject to confirmation of Council approval and final inspections, sale of my property etc.

5 STEPS AFTER SIGNING A CONTRACT FOR BUYING A HOUSE

Once you’ve committed to the purchase and signed the contract here are 5 steps you need to take immediately

        1. pay any deposit when due

        2. send a copy of the signed contract to your financier to start the formal application for finance approval

        3. engage the services of a building inspector if the contract is subject to a building and pest inspection

        4. arrange for building insurance cover to start straight away if the property is a house

        5. engage the services of a solicitor to do the conveyancing for you

For professional service from Brisbane’s most experienced conveyancing solicitor John Horrocks contact Horrocks Solicitors today for a fixed fee quote or a free contact review. Phone 07 3013 2300 or email admin@rivercityconveyancing.com.au.

5 questions to ask when buying a house