| By Louise Webb & Paul Byrne
No 1
Buying your first home can be a very daunting task. Many young couples (or singles) simply don't know where to begin once they enter into a Contract of Sale.
- Do I sign now ?
- Do I need legal representation ?
- How much is this transaction going to cost me ?
These are just a few of the matters that a buyer must consider at the Real Estate office.
Fortunately, there is a light at the end of the tunnel. Couples or singles over the age of 18 are entitled to receive the Federal Government's First Home Owner's Grant (FHOG) of $7,000.00 for the purchase or construction of a new home. This grant established in July 2000, has seen over 5,600 Queenslanders take advantage of it within the first quarter of this year.
There are a few things to note about the FHOG:
- There is no tax payable on the grant.
- You or your spouse must not have previously owned a residential property in Australia.
- Payment of the FHOG is not released until the transaction is completed (usually on the day of settlement), by way of an Electronic Funds Transfer payment.
- Buyers may use the FHOG as part of their legal or bank fees or simply use the Grant for other purposes. There are no restrictions or guidelines set to confine how you must spend the $7,000.00.
- Buyers also must occupy the home as their principal place of residence within one year of their FHOG application and remain in the home for a continuous period of six months.
The FHOG Application form can be completed through your financial institution at the time of applying for finance. The financier will then lodge it on your behalf. Alternatively, you can complete it through the Office of State Revenue direct.
No 2
In the last topic we discussed the First Home Owner's Grant. On the expenses side of the transaction, these can be divided into:
- Legal expenses;
- Financier/loan related expenses;
- Government charges.
Legal fees are invariably quite small in the grand scheme of things and the best advice we can give you is to either use your present trusted solicitor or ask a friend, whose opinion you trust, for a referral to a solicitor who will take care of the many steps – especially involved in purchasing a property, for you.
Bank fees and charges vary so much from one financial institution to another. Application fees are usually the first of a number of charges that financial institutions make to home buyers (or sellers) who are using the bank's services. Once again, the best advice is to shop around. A number of newspapers provide week by week comparisons in interest rates on mortgages, loan application fees and the like as between the various financial institutions.
One thing they all have in common is that they all do it alot and therefore most financial institutions will be well prepared to give you an upfront exhaustive list of their fees and charges that will affect you.
By far the largest component of the government charges is stamp duty.
Stamp duty is governed by the Office of State Revenue – an office within the Queensland Treasury that is responsible for revenue collection services.
Stamp duty on the purchase of a home is calculated on the dutiable value of the property. The rate of duty increases with the consideration or value.
From 1st August 2004, the transfer stamp duty concessions available for the purchase of a home have been extended. No duty applies for first home buyers for the purchase of a home up to a consideration value of $250,000.00. A concessional rate of duty applies thereafter.
This extension is designed to accommodate the ever increasing real estate prices and to reduce the costs associated with buying your first home. | 