Thursday, May 15, 2014

What should a First Home Saver Account Holder do?

This week's federal budget has landed a quiet blow to the 46,000 people who have opened up a First Home Saver Account, but the news is not all bad. Whilst the program will be wound up, one advantage is that all 42,000 account holders will be able to withdraw their savings at the end of the next financial year without having to buy a house to withdraw the money.

The FHSA were supposed to help hundreds of thousands of first homebuyers when it was launched in 2008 with a prediction that over $4 billion dollars will be held in those accounts by this time but only $521 million sit in the 46,000 accounts with an average of $11,000 in each account.

If you have a current FHSA, our understanding is that the 17% government co-contribution will continue for all deposits up to $6,000 in the 2013/14 financial year. That means if you haven't put in any money into your FHSA this year because you were not sure whether you would be able to get the money out, it may be a good idea to make the most of the $1,020 co-contribution still available if you transfer $6,000 into your FHSA. Even if you don't get the co-contribution, your interest earned in that account still gets only taxed at 15% and you can get the money out at the end of next financial year.

This is from the ATO website

Abolition of the first home saver accounts (FHSA) scheme

In the 2014-15 Budget, the Federal Government announced the following changes to abolish the first home saver accounts scheme;
  • New accounts created in respect of applications made from 7.30pm, Tuesday 13 May 2014 will not be able to access any concessions or the government contribution.
  • Eligibility for a government contribution will cease from 1 July 2014.  Existing account holders will continue to receive the government contribution for personal contributions made during the 2013-14 income year.
  • Tax and social security concessions will cease from 1 July 2015.  Existing account holders will continue to receive all tax and social security concessions associated with these accounts for the 2013-14 and 2014-15 income years.
  • Restrictions on withdrawals will be removed from 1 July 2015.
Once the first home saver account scheme is abolished from 1 July 2015, these accounts will be treated like any other account held with a provider.
The existing rules will continue to apply until the law is changed.

Friday, May 9, 2014

45 Perth Suburbs Under Stamp Duty Exemption $430,000

The biggest announcement for real estate in WA from the Budget is that the government will drop the threshold for houses with stamp duty exemption to $430,000. The median house price in WA is at $545,000 which means that it is increasingly harder to find a property which will not attract any stamp duty. According to RP Data, only 45 suburbs in Perth and the extended metropolitan area have a median house price of less than $430,000. To help you with visualising this, we have placed all 45 suburbs in a map which also shows their distance from Perth city. You can see this here



MEDIAN HOUSE PRICES BELOW $430,000
Source: RP Data. All data is to February 2014.
ARMADALE $315,000
BALGA $416,000
BANKSIA GROVE $415,500
BEECHBORO $430,000
BELLEVUE $352,000
BERTRAM $415,000
BROOKDALE $309,750
BUTLER $430,000
CALISTA $307,500
CAMILLO $312,000
CLARKSON $429,000
COOLOONGUP $323,500
ELLENBROOK $430,000
GIRRAWHEEN $390,000
GOLDEN BAY $392,500
GOSNELLS $365,000
HERNE HILL $421,500
HILLMAN $330,000
KELMSCOTT $360,000
KENWICK $405,000
KOONDOOLA $397,000
KOONGAMIA $352,000
LANGFORD $402,000
LEDA $327,000
LOCKRIDGE $372,000
MADDINGTON $360,000
MEDINA $272,500
MERRIWA $377,000
MIDDLE SWAN $380,000
MIDLAND $395,000
MIDVALE $350,000
MIRRABOOKA $401,000
MUNDIJONG $395,000
ORELIA $328,750
PARMELIA $315,000
PORT KENNEDY $397,000
RIDGEWOOD $421,500
SAFETY BAY $420,000
SEVILLE GROVE $380,000
STRATTON $357,250
SWAN VIEW $407,000
TWO ROCKS $402,000
WAIKIKI $390,000
WARNBRO $360,000
YANCHEP $422,000

Thursday, May 8, 2014

Rents Down Vacancies Up in Perth

REIWA has reported that the median rent per week has dropped 2% to $450 in the metro area over the last three months to April. The vacancy signs are out for 4% of properties which seems to be resulting from an extra 5000 rental homes on the market.

What is most surprising is that compared to last year, there are 56% more available rentals in the market. The RBA also announced this week that they will continue to leave interest rates at the same rate as the last few months.

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