After weeks of media speculation, on Tuesday, May 9 the Federal Budget was released. To help you navigate the changes, we have pulled together key insights. To review the full budget release visit: 2017 Federal Budget

Childcare & Education

  • A $37.3 billion increase in spending for childcare over four years, has been outlaid in this years budget. This will provide more affordable childcare, including after school care, for around one million families.
  • Working parents earning $185, 710 or less will not face an annual cap under the Child Care Subsidy. A $10,000 cap will apply for families earning more than this.
  • Education: University fees will rise by 1.8 per cent next year, and 7.5 per cent by 2022, increasing the share of fees paid by students from the current level of 40 percent to 41.8% – which could be up to $3,600 for a four-year university degree. HELP: The income threshold for repayments to higher education loans (HELP) has been lowered to $42,000, meaning students will have to start repaying loans sooner.
  • $428 million in funding has been announced for ‘Universal Access’ to support all Australian children to gain access to 15 hours per week of preschool programs, regardless of the setting (this may include day-care facilities) under the National Partnership Agreement.
  • An additional $18.6 billion has been allocated to schools over the next ten years under a new needs-based model. 20% of government schools, and 80% of non-government schools will share an increase in funding. On average per-student funding will be increased by 4.1%.

Housing affordability

  • A proposed $375.3 million in funding for the new National Housing and Homelessness Agreement (NHHA) will help to provide more affordable housing for the most vulnerable. This funding, which will be matched by State and Territory Governments, will support homelessness support services.
  • First time buyers will be able to make voluntary contributions to their superannuation up to $30, 000 to pay for a deposit on a first house or apartment. Similar to a salary-sacrificing program, this will assist with First home owners gaining access to the housing market faster.
  • A tax benefit for retirees who are downsizing their homes will allow them to transfer up to $300,000 (per person) into a superannuation fund. This is aimed to encourage retirees who are currently living in larger homes to free up housing stock for young families who are entering the property market.
  • SUPPLY: Aimed to address the low housing supply in Australia, the government will divest 127 hectares of surplus Defence land less than 10 kilometres from the Melbourne CBD. This land is large enough to develop up to 6,000 new homes.

Job seekers

  • The new Skilling Australians Fund will support up to 300,000 apprenticeships, traineeships and higher level skilled Australians.

Healthcare

  • The Budget is investing $2.8 billion for public hospitals.
  • An increase in the Medicare Levy to 2.5% (up from 2%) in 2019 will guarantee the funding for the National Disability Insurance Scheme.
  • The budget has funded $65.9 million for the Medical Research Future Fund to support health research. In addition, $5.8 million will support childhood cancer research.
  • $115 million has been directed to mental health, including research, rural support, psychological services and suicide prevention.
  • Freeze on Medicare rebates for bulk-billed consultations has been removed. $1.2 billion will go to funding new medicines on the Pharmaceutical Benefits Scheme, making them more affordable for consumers.

Transport & infrastructure

  • $1.6 billion of Federal funds towards a $2.3 billion infrastructure package for WA including the top three by proposed dollar investment;
  1. Kwinana Freeway – Armadale & North Lake Roads
  2. Leach Highway – upgrade to High Street
  3. Access to Fiona Stanley Hospital
  • $8.4 billion funding has been announced for an inland rail freight project linking Melbourne and Brisbane offering transit time of less than 24 hours, which will save an estimated 10 hours on the existing route.
  • The Budget includes funding for a second airport in Sydney at Badgerys Creek, which will cost approx $5.3 billion and will likely open in 2026. Further investment of $3.6 billion for infrastructure in Western Sydney to support population growth in the region by a further $1 million by 2030.

mortgage broker fremantle

You’re almost there! You’ve spent years budgeting to buy your own home and now you just need that final cash injection to break into the property market.

Pop quiz time, hands on your buzzers, first-timers. Do you: 1) Continue living off two-minute noodles for another five years and hoard your pennies? 2) Cash-in your grandpa’s beloved stamp collection? Or 3) Ask your mortgage and finance broker about this mystery thing they call the First Home Owner Grant (FHOG)? That’s right, Option 3 is the winning answer and the good news we have for you is that the First Home Owner Grant has recently increased in many states of Australia!

What is the first home owner grant (FHOG)?

The FHOG is a national initiative designed to help young go-getters like yourself to swing a leg onto the property ladder. You can use the one-off grant as part of your deposit, or put it towards other purchasing costs. There are some major provisos: it must be used to buy or construct a brand new home that has not been previously occupied or sold, and it must be used as your place of residence. In some instances, substantially renovated properties that have undergone major structural changes may qualify.

Who is eligible?

Naturally, the Australian Government isn’t going to give away money to everyone who asks for it. The eligibility conditions for the FHOG are quite strict.

To be eligible for the FHOG, you or your spouse must:

  • Intend to live in the home as your principal place of residence (PPR) for six to 12 continuous months, depending on the state or territory, within 12 months of settlement or completion of construction.
  • Be aged 18 or over.
  • Be an Australian Citizen or Permanent Resident.

You don’t qualify if you or your spouse have previously:

  • Received a FHOG in Australia already.
  • Owned a home in Australia, either jointly or separately, prior to July 1, 2000.
  • Occupied, for a continuous period of at least six months, a home in which either of you acquired a relevant interest on or after July 1, 2000, in Australia.
  • Depending on the state or territory in which you purchase your home, other conditions may apply. So please talk to us if you’re unsure if you’re eligible for the FHOG.

Could there be more good news?

Yes! The FHOG is currently under review, so it’s worth visiting your state’s office of revenue website from time to time to see what’s on offer. You may even want to consider moving interstate. How much you can get or save as a first home buyer, often depends on where you want to live.

It’s definitely worth checking out, because you may find you’re eligible for other big savings, like on stamp duty fees in some states. For example, from July 1, the Victorian Government is going to be scrapping stamp duty for first homebuyers for properties up to $600,000, with further discounts for new or existing homes between $600,000 and $750,000. Stamp duty is usually one of the biggest expenses if you’re buying a home, so this may make all the difference to your ability to climb onto the property ladder sooner rather than later.

What’s available around the nation?

The winner of the “most generous” award goes to the Northern Territory. Those wonderful peeps who call the Red Centre home are offering $26,000 to eligible first-home buyers, regardless of the value of the property. In Queensland, first home buyers can receive $20,000 until June 30 (then its $15,000) for properties valued up to $750,000. If you can live with the weather, Tasmania may be the place to buy, with no value cap and a $20,000 FHOG until June 30, when it reverts to $10,000.

In South Australia (SA) and Western Australia (WA), the FHOG is $15,000. In SA, the value cap is $575,000, while in WA, it depends on geographic location (for Perth, its $750,000). Victoria and NSW offer a $10,000 FHOG for new homes valued up to $750,000, but from July 1 the FHOG will double to $20,000 for new homes built in regional Victoria. Lastly, the ACT offer $7,000 for properties up to $750,000. (Data current March 2017).

We’re here for you.

Talking to a mortgage broker about purchasing your first home is always a great idea. We’re happy to give you the benefit of our knowledge, even if you’re not quite ready to buy. You can ask us to help you create a budget, establish a plan to clear off your credit card and other debts, and save a deposit. When you’re ready, we are here to help you secure a loan and choose a home that you can realistically afford, given your income and personal financial circumstances. Get an expert on your team by calling us today!


Copyright 2016