NSW Stamp Duty Slashed, a Major Boost for First Home Buyers and Construction Sector

The major victors under a targeted stimulus plan, which removes stamp duty on newly constructed houses under $800,000 and cut thousands of dollars for homes valued for up to $1 million are first home buyers and the construction sector, in general.

As part of the government’s COVID-19 Recovery Plan, the change in stamp duty ceiling is boosting housing construction across NSW and create jobs in the construction industry.

The changes include increasing the threshold at which stamp duty is to be paid for new homes for first home buyers from $650,000 to $800,000, with the concession declining as prices increase before being eliminated at $1 million.

The government expects that the changes is likely to benefit over 6000 first home buyers, with eligible applicants getting thousands of dollars in savings.

In addition, the stamp duty threshold on vacant lots has increase from $350,000 to $400,000 and is removed at $500,000.

The new rule only covers newly constructed home and vacant lots, not existing properties, and is valid for 12 months, starting from 1 August 2020. Existing schemes will continue to be applied for other purchases.

According to Treasurer Dominic Perrottet, the stamp duty savings for first home buyers amount to is no less than $31,335 on a new home valued at $800,000.

Since July 2017, over 93,000 first home buyers have benefitted from the existing scheme, and the building sector will get added support as the country confronts the challenges of the current health crisis.

Other NSW government schemes also continues to include a $10,000 First Home Owner Grant, which is open to first home buyers eyeing a property worth no more than $600,000, or purchasing a lot and constructing a new first home valued at no more than $750,000.

This means a first home buyer should expect to benefit a maximum amount of $32,335 if they are buying a new property and being eligible for the grant.

Indicative tax threshold changes:

Property Type Existing stamp duty amount for eligible first home buyers New stamp duty amount for eligible first home buyers Saving
Vacant Land $350,000 $0 $0 No change
Vacant Land $400,000 $0 $0 $7793
New home $650,000 $0 $0 No change
New home $700,000 $10,445 $0 $10,445
New home $800,000 $31,335 $0 $31,335
New home $900,000 $35,835 $20,168 $15,668
Existing home $650,000 $0 $0 No change
Existing home $800,000 $31,335 $31,335 No change

 

 

 

 

 

Interior Design Tips for Spring

Spring is here. The sun is up longer, the temp is becoming hotter, temperas are getting brighter – start redesigning your home to complement your renewed outlook on life.

So, what’s popular? And how do you get the vibe you want in a cost-effective way. Here are six design tips for restyling your home and bringing an uplifting feel to match your mood.

  1. Channel your inner “Marie Kondo”

Spring boosts your mind and body. So if something in your home doesn’t spark joy, maybe they should be out for this season.

Check out every room – bedroom to kitchen, kitchen to living area – look in detail at everything from the furniture to rugs, artwork, knick-knacks and towels. It’s time to discard them or store them, especially if they no longer bring you joy.

  1. Don’t be afraid of change

At this stage, you should only see things that give off an invigorating vibe. Now, search for new ways to fall in love once again.

Look at every room in your home from various perspectives. This will allow you to think about how switching up objects or re-pairing items from other rooms can create new energy.

Will putting the sofa to a different location in your living area help you view your home in a new way? Even minor adjustments like moving the rugs to different areas can reinvigorate a space.

  1. Up-cycle furniture

What is an enjoyable, sustainable project that lets you save money and more importantly, helps in reducing landfill waste? Yes, it is up-cycling! It generally involves transforming unused, pre-loved furniture and materials into something fresh. Imagine a picnic bench sawed in two and installed on the wall to create a useful workstation, or giving an old wooden ladder a fresh coat of paint and turning it into a carefully curated bookshelf.

Here are some tips if you are new to up-cycling:

  • Begin with wood furniture. Working on wood is pretty simple. Once you’ve got the hang of it, you can move to the next level, like resurfacing iron vintage bathtubs.
  • Give your old furniture a new, contemporary look using Annie Sloan chalkboard. (Don’t hesitate about experimenting with colours.)
  • Use tools that you are comfortable with. Some people prefer traditional tools such as sandpaper and manual hand drills, while others spend on the latest power tools.
  • Enjoy – up-cycling is all about trying out new things.
  • Check out my Pinterest Page for inspiration
  1. Switch to your heart’s content

Seasons change. So when designing your home, consider purchasing two sets of items in varying mood styles that you can change over when it’s summer and the sun is out to bring a brighter atmosphere.

Spring this Year:

  • White or pale pink hand towels
  • Throw blankets made of cotton or linen
  • Natural textures like jute
  • Inspiring artwork that stresses growth and renewal

Winter next Year:

  • Thick, comfortable hand towels
  • Heavy imitation fur throws
  • Cable knit blankets
  • Darker, moody artworks
  1. Green landscape

Colourful blooms come to mind when you think of spring, so there’s no reason not to bring them inside. One of the simplest ways to breathe life into your home’s new season décor is with fresh flowers.

Some of the popular spring flowers include King Protea, Peony, Scabiosa Flower, Brunia, Kangaroo Paws and Geraldton Wax. Organise them in a beautiful dining table centrepiece to create a cheerful explosion of colour in your home.  Here are some more inspiration at my Pinterest Page.

  1. Use colours all around you

More than a season, spring is a feeling. When decorating, use colours that create the vibe you want to feel at home.

Cool tones combined with light neutrals bring a breezy mood. Crisp white is simple and classic, letting light bounce inside your home so you can softly layer hues. To achieve a brighter atmosphere, use tropical colours such as fuchsia pink and tangerine orange.  Check out some other Colour Combinations here!

 

 

 

A Guide to Estimating your Home’s Value

If you’re thinking of selling your home, you’ll likely ask yourself, “What is the market value of my home?”  Not only will detailed property research help you to determine whether or not it is the ideal to sell, but you can meet and negotiate with real estate agents with confidence when you’ve done your homework.

Here is a how-to on estimating your home’s value:

Check out recently sold identical homes in your area

Because location and access to amenities all impact a property’s value, it’s important for you to check out homes that are comparable to yours and have been sold recently (within the past six months or so). Check sold listings on sites such as Realestate.com.au and Domain.com.au and create a list of similar homes and their selling prices.

Compare and rank features

It’s not likely for you to find examples of properties that are similar to yours. But you can rate your home versus identical properties using certain features. Do this by checking properties with the same:

  • Number of bedrooms and bathrooms
  • Building style (for examples, new build or heritage)
  • Land size and size of the home
  • Condition and state of repair – does it require renovation? Are the fittings and appliances up to date?
  • Outdoor features like a garage or off-road parking, swimming pool and gardens

For instance, picture that your property has a Victorian terrace identical to another that sold across the road, however, that property has a larger backyard and back lane access. What this means is that your home might have a lower market value. In contrast, if that property requires renovations and yours has recently been upgraded, your home could sell for a higher price. But regardless, valuation at this period should be considered an estimate.

Monitor the property market

It will always be a case-to-case basis when you compare one property with another. This is why it’s important to know the market in your location and what buyers are looking for property in your area. You have to track the time it takes different types of properties to sell, as well as auctions in your neighbourhood.

Aside from regularly reading property news, you can also utilise tools such as the CoreLogic Home Value Index, which monitors monthly changes throughout Australia. A rise in average home prices in your location will normally follow a rise in the market value of your property as well.

What elements affect property value?

Several factors impact a property’s value, which is why it is a job that is best done by experts. However, consider the following if you want to get a general idea of how much your property could be worth:

General factors:

  • Whether the time is a buyer’s market or a seller’s market
  • Present interest rates and home loan restrictions
  • The general economic outlook
  • The present situation of the property market and average property prices
  • Expected population growth in your location

Property features:

  • The size of the land and property
  • The state of the property and potential for renovation
  • Location, street and curb appeal
  • How many bedrooms and bathrooms the property has
  • Energy efficiency
  • Parking
  • Outdoor elements such as landscaping and swimming pool

What are the usual property valuation mistakes?

  • Comparing different properties, properties purchased too long ago
  • Not being current with market trends
  • Using emotion to value a property
  • Using properties currently on the market for comparison. Don’t forget that the only good indicator of value is the market value, not price guides of properties that are still on the market
  • Using untrustworthy sources of information, rather than reliable industry publications

What is the value of my property?

Volatile best describes the property market. It is the fact that the only way you can know for sure how much your property is worth is when it is purchased by someone. But getting the opinion of a property specialist is a great way to know the present value of your home and help you decide on the right time to sell.

A property agent can also explain finer data details, like the number of days a property was on the market before it was sold, the medium house price in your location and where the property is located, and the auction clearance rates, which can indicate the level of demand for property in your area.

Generally, there are two ways to determine the value of your property without cost to you:

Get a free online property estimate. There are plenty of online tools that give you an estimated value of your property instantly. You just have to type in your address. These free reports give you an in-depth knowledge of your property and the market with detailed information including property value estimate, comparable sales and past suburb performances.

Sign up for a free property appraisal. Find a real estate agent that will visit your property without obligation, and recommend a possible selling price using recent market activity. The agent should also walk you through the selling process and what is included in their service.

First Home Buyers Are Buying Property Using Parental Guarantee

While most of us are staying home and spending less due to Covid-19, saving for a deposit remains one of the biggest challenges for first home buyers.

This is when parental guarantee is being used for this purpose and both children and parents appear to realise the benefits.

What is parental guarantee?

A parental guarantee is when parents offer a property they own as extra security to cover the difference between your current savings and 80% of the value of your future home.

Don’t associate this strategy with affordability, as it is completely a different issue. This is because parental guarantee only tackles a savings or equity deficit. It is not entered into frivolously as it is provided by a mortgage. But it can be discharged once the home has enough equity to be refinanced out or stand on its own.

The following can be provided by a good guarantee structure – as they are not all similar.

  • Restrict the guarantors’ exposure to just this gap and negligible expenses
  • Not obligate the guarantors to refinance or readjust their finances
  • Not obligate the guarantors to provide too much evidence of income. However, guarantors are protected to make sure there is a way for them to end the guarantee without losing their property in case you are unable to continue servicing the loan. Since this is a possible risk for guarantors, it is best to consider other ways like paying it off, or superannuation, or other assets than the family residence.
  • In the worst case scenario, let the guarantors make the payments on the limited guarantee part to end it prior to a discussion of the sale of any of their assets.
  • One guarantee will let first home buyers merge a minor debt – making repayments more affordable in the long run – and free some cash out for home upgrades; only if the guarantors agree.

Those who are buying a home to live in who already own an investment can also avail of this type of investment. However, there isn’t sufficient equity in the home to support the home buy.

To emphasize, these are not designed to put your parent’s home at risk to help you in building your portfolio, but a rational strategy can be used in situations where it’s practical to use a guarantee, and for many borrowers it may not be easy to save and pay rent.

The pros:

  • Hasten your entry into the property market
  • Doesn’t require you to save a deposit (though if you have a deposit saved you can end the guarantee quicker)
  • Access to lower interest rates than if you went in with a small deposit.
  • You can complete upgrades on a low-priced property (which could possibly increase its value)

The cons:

  • Both parents and borrowers are bluntly warned that it’s a mortgage and must be regarded seriously.
  • If you cease making payments, you are putting your own and your parents’ property at risk
  • Establishing it involves certain complexity and time – but not too demanding.
  • Lenders generally require parents to get legal advice, and this is normally done after it is too late for you to cancel the home purchase.

In documents, it will appear to be one loan in most situations, you will be responsible for all repayments and get all the statements. In short, you are wholly responsible.

In addition, the bank will not start the discharge of the second security. This is important to remember and it is recommended that you keep yourself updated on the market.

In most situations, the market will do most of the work in increasing your equity while you keep on making repayments, until such time you can a valuation done on your home, find out your loan has reached 80% of the new value and apply to free the guarantee.

These have no specific time frame but based on experience the time frame is often roughly five years/

With regards to the approval process, get ready to respond to additional questions relating to your income stability due to COVID-19 and any effect it might have had to your financial situation. Borrowers are required to have a good credit history, but on the positive side, where line by line expense analysis is happening for the majority of us we are experiencing lower expenses and this creates a great opportunity to both save and illustrate our capacity to finance our future new home.