For many Victorians, owning your own home is part of the Great Australian Dream. Buying your first home or investment property in Victoria doesn't come without its hurdles and challenges along the way.
Rising house prices can make it increasingly difficult to buy property in Melbourne. Luckily, the Victorian Government has recognised these challenges that home buyers face. Rules and regulations for buying and selling property are always being amended along with the introduction of incentives to encourage new property investors.
Seeking advice from professionals such as financial planners, conveyancers, and real estate agents can help set you on the right path to buying your first property.
Before you try getting your foot in the door, there's some key information you should know about buying in Melbourne.
Incentives for first home buyers
If you are buying or building a new home in Victoria, you may be eligible for a first home owner grant (FHOG) valued at $10,000. There are of course specific criteria you must meet to qualify for this grant.
The property must be valued at $750,000 or less. This property can be a house, townhouse, apartment, unit or something similar and it must be the first residential property you have ever purchased. If you have a spouse or partner that has previously used the FHOG or purchased a property, you will most likely be ineligible.
The location of the house can also have an affect on the amount you get for an FHOG. If you are buying your first property in regional Victoria, you could be eligible for a grant of up to $20,000.
Another great incentive for first-home buyers is a buyer duty reduction. If you are buying your first home and it's valued at $600,000 or less, you may be entitled to a 50 per cent reduction in stamp duty. Other concessions and reductions are available depending on factors such as whether you are a first home buyer with a family, a pensioner or buying off the plan.
It is in your best interests to research and find out about any concessions and reductions that could be available to you. These can give you much needed help for getting into the Victorian property market.
Statement of information and underquoting
A statement of information is a collection of documents that a seller of property must make available to all prospective buyers. So whenever you have a genuine interest in buying a property, always ask for a statement of information. The statement must include the following:
- An indicative selling price for the property (single price or price range of up to 10%)
- Details of the three most comparable properties (including address, date of sale, sale price)
- The median house or unit price for the suburb (depending on what is being sold)
In May 2017, new changes to the Estate Agents Act 1980 came into effect to help prevent underquoting in Victoria. If a property is underquoted, it is advertised at a price that is less than the estimated selling price, the seller's asking price, or at a price already rejected by the seller.
Victorian real estate agents now have additional obligations relating to the following:
- The estimated selling price
- Comparable property sales
- Statement of Information for buyers
- Advertising prices, terms and symbols
Researching the median house price for the property's suburb can help you determine whether or not it's being underquoted. Having a knowledge of local house prices can help you make a more informed decision if you do decide to bid on the the property come auction day.
Sometimes the dream home you want to buy in Melbourne isn't exactly what you had in mind, but the potential is there. You may have the desire to renovate and improve on the building's current design. It's important to look into the laws and regulations for building permits before you buy a house you want to renovate.
Regulations and restrictions for building permits can vary depending on the type of building and which council the house's suburb is a part of. The local council's planning department may be able to inform you of any restrictions on what can be done such as building beyond a certain height or if trees can be removed.
If you're buying an older property, there may be severe limitations on what can be done regarding renovations. Heritage homes can have considerable restrictions on it to prevent anyone dramatically changing the architecture or streetscape significance.
Digital duties form
As of 1 July 2017, all contracts and agreements relating to the transfer of land must be done through a digital duties form. Duties Online (DOL) is a government-initiated lodgement channel that streamlines the signing and collation of documents and forms relating to the transfer of property ownership.
Your solicitor or conveyancer should already be a registered DOL user. For a land transfer, it is no longer necessary to have the transfer of land stamped. When this electronic transaction is finalised and paid for, DOL instantly transmits confirmation of duty assessment to the Registrar of Titles.
Confirmation details are stored in a database until the transfer of land is lodged for registration. These details are used to confirm that obligations have been met by both parties involved in the transfer of a property title.
If you're thinking about buying property in Melbourne or Victoria and have any questions about conveyancing, contact Conveyancing.com today.