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First Home Buyers And The New Financial Year


As we enter a new financial year, many first home buyers are blissfully unaware as to how this can affect buying property – so what do you need to know?

The big attraction of buying your own home is just that – it’s yours, once you’ve paid back the banks of course. Apart from having somewhere to live, the quest for home ownership is also about having a long term investment strategy. If we’re looking at it from the viewpoint of decades instead of months, generally house prices do rise, and so does the value of your investment.

Buying your first property is also one of the first steps of building wealth as the equity in the home could allow you the opportunity to access further loans if that’s what’s on your radar, such as shares, a managed fund, or even a second investment property – but entering the market as a first home buyer isn’t always easy.

For many people, buying their first home will be the biggest purchase they ever make – and knowing just where to start can feel a bit overwhelming. Thankfully, the Australian Federal Government has a range of funding and grants available for those looking to get a leg up into the property market such as the Land Transfer Duty Initiative and the First Home Buyers Grant, which many newbies to the world of property are usually semi familiar with. 

However, there’s a relatively new grant available that many first home buyers may not be aware of and it’s crucial that you understand how it works at tax time if you hope to make the most of it.

The First Home Loan Deposit Scheme and Tax Time

The First Home Loan Deposit Scheme (FHLDS) was first released on January 1, 2020 and is an Australian Government initiative to support eligible first home buyers to build or purchase a first home sooner.

While buyers are usually required to save a 20% deposit or otherwise pay Lenders Mortgage Insurance, under the FHLDS eligible first home buyers can purchase or build a new home with a deposit of as little as 5% with the government actually guaranteeing the remaining amount.

In essence, the FHLDS functions in a similar fashion to a traditional family guarantor loan, except it’s the government that fronts up to vouch for you and in turn shoulder the risk. While the scheme doesn’t offer a cash payment, the good news is that you can use it in conjunction with any other government grants, schemes, concessions and waivers you qualify for, with the aim being to get Australians into their first home faster.

For those who meet the eligibility criteria, the government has boosted this by adding an extra 10,000 places to the scheme from July 1, 2021 – except this time, it’s for both new and existing homes. However, one of the key pieces of documentation required in order to apply for the next rollout of the First Home Loan Deposit Scheme is your 2021 Notice of Assessment, which you will receive once you have lodged your 2020/2021 tax return.

To ensure you have a chance of securing a place on the First Home Loan Deposit Scheme, Cherry Lending & Finance highly recommends that you complete your 2020/2021 tax return as soon as you can so that you have your Notice of Assessment ready for your application. This way, you could be first in line when it comes to being one of those 10,000 successful grant recipients and are well on your way to getting into your first home faster.

Get The Right Advice for First Home Buyers

Getting on top of your paperwork, dealing with lending providers and trying to source the right loan to suit your individual needs can be an extremely stressful experience, particularly if you’re a first home buyer – but the good news is that it doesn’t have to be.

With a background in banking, finance, business development and project management, there is no better advocate to have on your team than Nikki Berzin. As a fully qualified mortgage broker and director of Cherry Lending & Finance, Nikki is passionate about all things finance, and empowering her clients with the tools to hit their property goals is what she does best.

If you are looking to get into your first home, purchase an investment property or even want to look at your options for refinancing, the first step is starting the conversation. Get in touch with Nikki today, or call her directly on 0427 374 155 to bring your mortgage dreams to life.

Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.  Subject to lenders terms and conditions, fees and charges and eligibility apply.