As millennials we all know how hard the thought of becoming a homeowner and getting yourself into the market can be. Well, lucky for us a new bone has been thrown our way and it might just make the idea of buying a home seem that little bit more in reach.
While this new scheme is not going to earn you tens of thousands of dollars, it would see you earn around two to three thousand dollars back in interest if you save $30,000. It’s particularly fantastic if you’re somebody who has a term deposit or savings account with high interest but all it takes is a few wines before you dip into the account for your next boozy adventure with mates. Essentially this is a forced savings account for people who can’t trust themselves or find it difficult to save. You’re forced to lock away your pennies until you’re ready to buy your first home.
Australian treasurer, Scott Morrison, proposed this new salary sacrifice scheme for first-home buyers, and this is what we know about it so far.
The idea is that from the 1st of July this year, first home buyers will be able to save their first home deposit by making additional contributions to their superannuation. The total amount is capped at $30,000 or up to $15,000 a year (still capped at the same $30,000 total). These additional superannuation contributions must be above and beyond your compulsory amount. The great thing about all this is that your additional contributions still benefit from the high interest of your super account, and are taken out of your salary pre-tax. Then all you need to do is find a fantastic first home, make your contributions and voila, you can withdraw your first home deposit from the 1st July 2018.
By getting this opportunity to save our own money before tax, it means that you’ll be able to save the money that you’ve actually earned without feeling as if we have nothing left to save after tax.
This scheme would aim to gradually help first home buyers get into the market over the next 5-6 years, which seems much more achievable than some of the home buying opportunities that we already have. The idea of saving real, hard-earned money is also more practical in the long-term than the government handing out grants all the time, because these grants are susceptible to inflation and in the end, make things more expensive than they were in the first place.
If the government can help us out through this salary sacrificing scheme, we’ll be able to prove that we do have a real ability to save our money! Everybody wins.
Besides this great new proposal, there are some other home buying options out there right now which might also be able to help us out.
First Home Owners Grant
Probably the most well known avenue for first home buyers to go to, the grant is a once off amount of money towards your investment. It’s available for the purchase or construction of a new home and various dollar amounts are available depending on the eligible individual circumstances of each situation.
This option is a great alternative available to graduates with a Certificate III or higher qualification. It’s a great choice for either first home buyers or for graduates just looking at buying their next home. The cool thing about this one is that it can be combined with another loan so we’re able to increase what can be borrowed without any repayments rising.
Low Deposit Loan
The low deposit loan is available for buying existing homes as either first-home buyers or buyers looking for their next house. It offers lower deposit options for houses that are located in the metropolitan areas of Adelaide. The requirements for getting this loan are simply that you have a good savings history and a clear credit record.
Check out some of these new homes on the market right now, which might not feel so far out of reach anymore!
Located on Churchill Road.
3 and 4 Bedroom Townhouses $450,000 -$ 500,000
Located on Pulteney Street.
1 Bedroom from $329,000 and 2 Bedroom from $469,000