2023 will ring in changes to stamp duty and home-buyer schemes around the country. Here’s a quick fly-over of shifts at national and State level set to kick in this year.
Help to Buy
The Albanese Government’s flagship housing policy Help to Buy is expected to launch in July this year.
But legislation has yet to be approved by Parliament, so keep an eye out for more information and key dates shortly. (An easy way to stay in the loop is to contact me).
Under the proposal, the Government will help 10,000 lower-income Australians buy a home by chipping in up to 40 per cent of the purchase price for new builds, and 30 per cent for existing homes.
Buyers can have as little as a 2 per cent deposit and will not have to pay Lenders Mortgage Insurance (LMI), which normally kicks in for deposits of less than 20 per cent.
Help to Buy not only reduces upfront costs, but slashes ongoing mortgage payments. Homeowners have the option to buy out the Government’s stake when they can afford to. Alternately, they can repay the loan, including pro-rata gains, when they sell.
The program is open to singles earning less than $90,000 and couples earning less than $120,000. The federal program is similar to shared-equity schemes already running in Victoria (Victorian Home Buyer Fund) and Tasmania (MyHome).
Regional First Home Buyers Guarantee
The Federal Government was quick off the mark and delivered early on this promise to support 10,000 regional buyers to get on to the property ladder with a smaller deposit than normal.
Originally slated to be introduced from January 1, the Regional First-Home Buyers Guarantee was brought forward and launched on October 1 last year because of extraordinary pressure on regional housing markets. One study estimated it took workers in regional centres more than 11 years to save a deposit.
The scheme runs until June 30 and will help 10,000 regional buyers avoid LMI, with the Government guaranteeing up to 15 per cent of the deposit.
This program is in addition to funding guarantees for 35,000 eligible first-home buyers nation-wide, and 5,000 exclusively for single parents.
The National Housing Finance and Investment Corporation website has a tool to help buyers find out if they’re eligible for any of the support schemes.
Building code changes
Those planning a home build should be aware of changes to boost the sustainability and accessibility of new homes across the country later this year. Changes to the National Construction Code have been contentious, with NSW, WA and SA opting out of reforms which will be introduced in other States in May and take legal effect from October.
In Queensland, the Master Builders Association has claimed new requirements for greater energy efficiency and access (including at least one step-free entry to every home) could add tens of thousands to already rising build costs.
NEW SOUTH WALES
There are big changes afoot in NSW this year, but not quite as big as Premier Dominic Perrottet may have wanted.
Premier Perrottet had previously signalled he was keen to move from a one-off stamp duty payment to a broad-based annual land tax for most NSW residents. But changes introduced from January this year are optional and only apply to first-home buyers.
They do, however, slash upfront costs.
From January 16, first-time buyers purchasing a house for less than $1.5million have the option of paying an ongoing annual land tax, rather than the traditional lump sum stamp duty.
Avoiding hefty entry fees can help buyers get into homes years earlier. On the flipside, analysts say those who choose to stay put longer than 10–15 years may end up paying more in the long run under an annual tax.
The economics vary according to the value of the property and tenure. As always, it’s worth running the numbers with me to see how the options stack up.
Just before Christmas the Government announced it had raised the threshold on homes eligible for State-backed Keystart low-deposit loans, lifting the cap from $480,000 to $560,000.
The change came into effect on December 12 and backs a move earlier in the year to permanently lift income thresholds on eligibility to $105,000 a year for singles and $155,000 for families. Thresholds are higher in regional and remote areas.
From July this year, WA will slash land tax by 50 per cent on eligible build-to-rent developments to support the industry in providing more affordable rentals.
Under the build-to-rent model, developers build apartments with a view to retaining ownership and deriving an income from renting units, rather than on-selling.
While this concession is aimed squarely at business, rather than home buyers, it’s hoped the benefit will flow on to consumers by increasing the stock of rentals.
Major changes looming in Queensland this year relate to owners and tenants in the rental market, with ongoing reforms aimed at providing more rights for tenants.
Landlords have been put on notice that from September 2023 all new rent arrangements will be subject to Minimum Housing Standards that require premises to be structurally sound, weatherproof, free from pests and mould, with fittings in good repair. From 2024, the standard will apply to all rental properties across the State.
Strategy for the future
The Apple Isle has undergone an unprecedented property boom, with prices more than doubling in some regions in the past five years, and rental stress soaring.
Recognising affordable housing as a priority, the Government is set to release a 20-year policy plan – the Tasmanian Housing Strategy – in July.
The strategy is expected to contain key announcements around social housing, build-to-rent and further shared equity support for home buyers to enter the market with Government help. The State currently has a First Homeowner Grant of $30,000 for new homes with no price cap.