Government Announcement; help First Home Buyers. Do you qualify?
Government Announcement; help First Home Buyers. But it is??
Many have been waiting, to hear what the Government will offer to help first home buyers
to get on the property ladder.
Here’s what the government has announced. I am going to tell you in plain English what it
means for you and how it can help first home buyers and investors onto or up the property
Increased Price Cap from $625,000 to $700,00 (Aucklanders). Sounds great, given the prices in Auckland. However, you must still be able to service this loan amount. The Bank will only
lend you the amount that you can service based on your current income level.
Increase Government Subsidy Single buyers can now earn up to $95,000 and get
financial assistance, up from $85,000. For two or more buyers of a single property,
the cap has been lifted from $130,000 to $150,000 (combined income). The amount
of contribution in still $5,000 for a single or $10,000 for a couple. This is it you are
buying brand new, or off the plan, property. No changes here.
Increase Bright Line Test from 5years to 10years. The government has also had in
place that an investment must be held for the long term. Long term has been defined
as 7yrs. The government and the bank know that most home owners hold property
for 7-10 years. The Bank counts on first home buyers wanting to upgrade from their
first home, after a period of 7 years. Investors will need to hold a property for
10years otherwise the bright line test, will be triggered.
Investors Deductibility Removed This will be phased out over 4 years. Investors who
hold and provide the largest amount of property for tenants. This is
a risk, given that investors provide housing to a large portion of the population, if an
investor incurs a cost, it will (usually) be passed onto the tenant, pushing rents
upwards. Investing is a business, like any other business, the costs are passed onto
There was a lot of hot air, and hype, on a situation that the government simply can’t
and doesn’t have the means to fix. The Government has not given anything, to help
first home buyers. If you want to get on the property ladder, keep saving a deposit. A
First Home Loan allows a first-home buyer to only need a five per cent deposit. If
you want to know more about getting some help, reach out.
I’d love to help you get on the property ladder.
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