{"id":41536,"date":"2023-01-16T09:03:27","date_gmt":"2023-01-15T20:03:27","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=41536"},"modified":"2023-01-16T09:03:27","modified_gmt":"2023-01-15T20:03:27","slug":"huge-problem-with-buying-a-house-in-sydney","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/huge-problem-with-buying-a-house-in-sydney\/","title":{"rendered":"Huge problem with buying a house in Sydney"},"content":{"rendered":"

PHOTO: Vivian Tao pictured at home in Sylvania Waters, in Sydney\u2019s south. Picture: NCA NewsWire \/ Damian Shaw<\/strong><\/p>\n

\n

For the past three years, prospective first-home buyer Vivian Tao has been searching for a property.<\/p>\n<\/div>\n

While the south Sydney woman is equipped with the know-how (thanks to a finance degree), savings nurtured since the age of 16 and generous parents willing to foot half of her deposit, the search has been \u201coverwhelming\u201d and the options limited.<\/p>\n

She\u2019s also been marred by a global pandemic, which was followed by inflation fears and rising interest rates.<\/p>\n

However, depending on a new slate of election promises on offer for NSW first-home buyers, the Sylvania Waters resident is \u201cdefinitely keen to buy\u201d in 2023.<\/p>\n

\u201cThe home I\u2019m looking for is the one that I want to live in. I want to experience what it\u2019s like to move out of home, while also having something that will appreciate over time,\u201d she tells NCA NewsWire.<\/p>\n

\"\"<\/a><\/div>\n
\n
\n

Profile your business (for 12 months) \u2013 ONLY $499 INCL GST<\/a><\/h2>\n<\/header>\n<\/div>\n

\u201cIdeally, I\u2019d like to get something like an apartment in a good area, that\u2019s close to the city and maybe has two bedrooms, depending on what I can afford.\u201d<\/p>\n

NCA NewsWire takes a look at which government policy would work for her.<\/p>\n

Election policies luring first home buyers<\/b><\/span><\/p>\n

This week, Leader of the Opposition Chris Minns proposed NSW Labor\u2019s revamped First Home Buyers scheme that scraps stamp duty for first-home purchases up to the value of $800,000. Properties under 1 million will also receive significant concessional rates. Currently the stamp duty free threshold is set at $650,000.<\/p>\n

According to statistics from NSW Labor, this would allow at least 95 per cent of NSW first-home buyers to receive a reduced rate on their stamp duty.<\/p>\n

\n
\n
\n
\n

NSW Stamp Duty Rates as of July 1, 2022<\/h3>\n<\/div>\n
\n
\n
\n
\n
\n
\n
\n\n\n\n\n\n\n\n\n\n\n
Property value<\/th>\nTransfer duty rate<\/th>\n<\/tr>\n<\/thead>\n
$0 to $15,000<\/td>\n$1.25 for every $100 (minimum $10)<\/td>\n<\/tr>\n
$15,000 to $32,000<\/td>\n$187 plus $1.50 for every $100 over $15,000<\/td>\n<\/tr>\n
$32,000 to $87,000<\/td>\n$442 plus $1.75 for every $100 over $32,000<\/td>\n<\/tr>\n
$87,000 to $327,000<\/td>\n$1,405 plus $3.50 for every $100 over $87,000<\/td>\n<\/tr>\n
$327,000 to $1,089,000<\/td>\n$9,805 plus $4.50 for every $100 over $327,000<\/td>\n<\/tr>\n
Over $1,089,000<\/td>\n$44,095 plus $5.50 for every $100 over $1,089,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
<\/div>\n<\/div>\n<\/div>\n<\/div>\n

The policy was released in response to the Coalition\u2019s First Home Buyer Choice scheme which officially kicks off on Monday. The plan, spruiked by Premier Dominic Perrottet allows potential first homebuyers to choose between paying stamp duty or an annual property tax for listings under $1.5 million.<\/p>\n

Government costings estimate the latter option would shave two years off the time it takes for someone to save for a home deposit.<\/p>\n

\"Elyse<\/a><\/div>\n
\n
\n

The Block\u2019s Elyse Knowles announces she\u2019s expecting her second child<\/a><\/h2>\n<\/header>\n<\/div>\n

The fee would be calculated at $400 plus 0.3 per cent of the land\u2019s value for owner-occupied homes, with investment properties slated for a yearly tax of $1500 plus 1.1 per cent of the land\u2019s value.<\/p>\n

 <\/p>\n

\u2018Big risk:\u2019 with $0 stamp duty choice<\/b><\/span><\/p>\n

Based in Sydney\u2019s Eastern Suburbs of Coogee, mortgage broker and founder of CBM Mortgages Craig McDonald says there are benefits and drawbacks with each plan put forward by the two major parties.<\/p>\n

He says it boils down to two things: how far from the city you want to live and your price bracket.<\/p>\n

Reviewing Labor\u2019s $800,000 stamp duty free cap, he said Sydney buyers, especially those who want to live in the metro areas may be restricted by apartment dwellings and location.<\/p>\n

However he says it\u2019s an improvement on the \u201cimpossible\u201d stamp duty waiver for properties under $650,000.<\/p>\n

\u201cYou will start seeing a fair few properties falling into the new proposed bracket, especially for single first home buyers in the Sydney metro area,\u201d says Mr McDonald.<\/p>\n

\n
\"Director<\/div>\n

Director of CBM Mortgages Craig McDonald says there are benefits and drawbacks to both schemes. Picture: Supplied.<\/strong><\/em><\/div>\n

\n
\"Sydney<\/div>\n

Sydney house prices may still be a barrier for buyers looking at metro properties. Picture: NCA NewsWire\/ Gaye Gerard<\/strong><\/em><\/div>\n

Although the Coalition\u2019s property tax option allows buyers the ability to waive stamp duty and pay an annual land tax of properties purchased below $1.5m, raising land values could mean that annual repayment increase.<\/p>\n

Mr McDonald said people will need to consider whether they want to their first property purchase to be their \u201cforever home, or a stop gap home\u201d.<\/p>\n

\u201cIf it\u2019s your home for the next 10 or 20 years it could be a good option as it would avoid the need to pay the lump sum stamp duty fee.<\/p>\n

\u201cHowever if it\u2019s your intention to convert that property to an investment property at a later date then you need to be aware that the annual fee will increase significantly.\u201d<\/p>\n

Mr McDonald says this is a \u201cbig risk\u201d for a lot of his clients who buy their original property with the intention to keep their first home as an investment once they choose to upgrade.<\/p>\n

\u201cThis happens with a lot of my clients as they purchase their first home and they know it\u2019s not their forever home because people start having families,\u201d he says.<\/p>\n

\u201cIf they waived the stamp duty and went for the property tax option, the premium becomes way higher once it becomes an investment. There\u2019s a big jump in the percentage cost.<\/p>\n

\u201cHowever, if you chose to sell that property, you probably would be doing quite well. It\u2019s going to work in your favour.\u201d<\/p>\n

\n
\n
\n
\n
\n
\n
\n
\n
\n
<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
\n
\n
\n
<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
\n
<\/div>\n<\/div>\n<\/div>\n<\/div>\n

First home buyer\u2019s verdict<\/b><\/span><\/p>\n

When asked, Ms Tao admits she doesn\u2019t know how long she would hold onto her first property, however she\u2019s more skewed towards a long-term approach.<\/p>\n

The idea of being able to own an investment property that drives passive income, is also appealing to her.<\/p>\n

\u201cI think it depends on what my next step is and what the property market looks like in the future,\u201d she says.<\/p>\n

If given the option, Ms Tao says that she finds NSW Labor\u2019s incentives more appealing, especially if she can find a home for under the $800,000 limit.<\/p>\n

Looking at properties in her dream list of suburbs including Roseberry, Hurstville, or even Kirribilli, she believes it\u2019s a possibility.<\/p>\n

\n
\"Ms<\/div>\n

Ms Tao believes she will be able to buy her first home for under $800,000. Picture: NCA NewsWire\/ Damian Shaw<\/strong><\/em><\/div>\n

\u201cI would obviously rather not pay stamp duty over having to pay the forever tax,\u201d she says.<\/p>\n

Ms Tao, who finds herself in one of the most expensive real estate markets, has to balance her property expectations, the reality of the market and getting approved by a bank.<\/p>\n

\u201cThe biggest challenge is price and the second one is saving up for the home, and your borrowing power is another big one,\u201d says Ms Tao.<\/p>\n

\u201cThere are a lot of ways you can invest your money but property is one that has a very big lump sum.\u201d<\/p>\n

READ MORE VIA NEWS.COM.AU<\/a><\/p>\n

MOST POPULAR IN NEW ZEALAND<\/span><\/h3>\n