When purchasing your home, don’t let yourself be overwhelmedby the experience. The process can be seamless and enjoyable when you tackle it in individual stages. From making the decision to purchase, to finding the right loan, saving for your deposit and finding and securing the perfect home. Step-by-step you can achieve your financial goals.
It gives you stability and freedom
Buying a home provides you with certainty; there’s no risk that you’ll be displaced by a landlord.
Tenants have very little say in how long they can occupy a rental property beyond the lease term.
Living in your own home also allows you the freedom to renovate and decorate your home as you
please.
Rise in house prices over time
Having an asset that may increase in value over time is appealing. While house prices have
consistently risen over the long-term, they can also have periods of weak growth or even fall in
value. You need to remember that home ownership is a long-term investment strategy.
The ability to use the equity in your home
Home equity is the proportion of your home that you own. Provided that the value of your house is
increasing, as you pay off your loan, your equity will also be increasing. You may then be able to
use the equity to fund an investment such as shares or a managed fund. See Refinancing
Tax benefit
Your home is generally exempt from tax if you’ve not run a business from it or rented it out
Capital gain tax:
you don’t pay capital gains tax (CGT) if you sell the home you live in (under the main residence
exemption).
GST
You’re not liable for goods and services tax (GST) when you sell your home
Land Tax
The land tax exemption applies to the principal place of residence. The exemption only applies to
natural persons and the exemption is not affected by the value or size of the land.
Deposit
You may be eligible for a first home buyer grant or other incentives such as stamp duty and land
tax reduction. With the help of a guarantor, a loan can be secured without a deposit.
Owner-occupier loan or Investor loan
When you’re applying for home loans to help you buy a house, you’ll need to specify whether you’re
applying for an owner-occupier loan or an investor loan. The distinction will most likely change the
rate at which you’ll be charged interest, whether you go with an offset mortgage, variable rates,
fixed home loan or construction financing.
Investment loans are typically the more expensive of the two, both in terms of interest rates and additional costs.
Some lenders may not charge higher closing fees for investment loans, but you should check the
specifications.
