First Home Loan Deposit Scheme | What is it? Are you eligible?
The new first home loan deposit scheme (FHLDS) aims to give first home buyers a leg up in the property market by reducing the deposit amount required to purchase a property.
First homebuyers were previously slugged with lenders mortgage insurance (LMI) if they did not come up with at least 20% deposit.
The First home loan deposit scheme works by providing a guarantee to first home buyers to purchase a property with as little as 5% deposit opposed to the onerous 20% required by most lenders. On a $500,000.00 property, that’s a whopping $75,000.00 difference!
The catch
Places are limited! The Australian Government has reported nearly 3,000 potential first homebuyers have registered with the banks since the 1st of January for the scheme. The remaining 7,000 places will open from the 1st February 2020. It is important that you have your finances in order, have spoken to a financier (i.e bank) and have started looking at potential properties.
Can you apply?
If you are a first time homebuyer then you are most likely eligible for the scheme. The Australian Government website has a handy eligibility tool to see if buyers qualify for the scheme. In a nutshell, you will need to be a first home buyer and:
· Pass the income test;
· A prior property ownership test;
· A deposit requirement; and
· Pass the owner occupier requirement.
Next steps
Before you sign a contract of make an offer on a property, make sure you get legal advice to protect your interests. At McLaughlin & Associates Lawyers we have a team dedicated to residential conveyancing. We can assist you with pre-purchase contract conditions and also make sure the contract you sign protects your interests. See our page on Conveyancing for more info and guides for buyers and sellers.
Written by Dominic Doan, Commercial and Property Solicitor
For further information or to book in a consultation please contact us at business@mclaughlinlawyers.com.au or phone us on 07 3808 7777.
Have any questions? Send us an email:
Read some of our other residential conveyancing articles:
· Buying a home and claiming PPR
Enduring Power of Attorney
Enduring Power of Attorney
When people think of estate planning they usually think of the need for superannuation, life insurance and income protection but equally important is the need for a Will and an Enduring Power of Attorney. I have spoken at length over the last month about the need for a Will now I wish to turn to the equally important aspect of having an Enduring Power of Attorney.
What is an Enduring Power of Attorney?
It is a document given by one person (the Donor) to another person (the Attorney) which enables the Attorney to act on behalf of the Donor and to do all things which the Donor could himself do. The Attorney in effect steps into the shoes of the Donor and can sign documents, access bank accounts etc.
Why do I need one?
Everybody should have an Enduring Power of Attorney appointing either their spouse, relative or close friend to act on their behalf in the event that they are either absent or mentally incapable of handling their affairs e.g. if you are out of town and need documents signed or access to monies or something to be done on your behalf which only an authorised person can do for you.
But the real benefit of an Enduring Power of Attorney is that the power to act on your behalf continues after you become mentally or physically incapable of doing things on your own behalf. For example, we have had cases where the husband and wife may, for tax purposes, have an investment property, shares or money invested in one persons name only. That person has suffered a stroke, heart attack or been in a motor car accident such that they are either physically or mentally incapable of handling their own affairs. The spouse may need to sell some of the assets or access some of the money in order to provide ongoing medical care for the injured party but because they don’t have an Enduring Power of Attorney that cannot easily be done. Instead, a Government appointed Trustee is nominated and as you can imagine, the process becomes very expensive and bogged down with red tape. That could all have been avoided by the making of an Enduring Power of Attorney.
Who should have one?
The simple answer is: Everybody! Spouses should each have one appointing the other their Attorney, the same applies for people in defacto relationships. But also think of the need for the elderly to appoint a child or children Attorney for them and also single children appointing a parent or parents as their Attorney.
It is especially important for adult children to think about their parents as they get older. By having an Enduring Power of Attorney a son or daughter can help their parents as they get on in life with accessing bank accounts, handling documents etc and in the event of mum or dad suffering a stroke or heart attack being able to handle their affairs.
For example, we had a case where an elderly woman suffered a stroke and was physically and mentally incapable of handling her affairs. The family home was in her name only and the children had to place her in a nursing home. The problem was that the home had to be maintained, the rates and insurance paid as well as meeting the costs of nursing care. There was no Enduring Power of Attorney. If there had been, the children could have sold the family home, placed the proceeds on trust for mum and met her ongoing care from the sale proceeds.
So think about it, if you have parents (it doesn’t matter how old they are now) seriously consider the benefit to them and you of having an Enduring Power of Attorney so that one day you will not face the same problems as the family mentioned above.
Video
Prefer the video format? Our principal, John McLaughlin, provides an informative Law Talk episode about the Enduring Powers of Attorney
The Pole Dancer and the Prenup
Prenup agreements are now part and parcel of the Australian Legal Industry whereas they used to be something you would only read about in the Hollywood tabloids. However, amongst the legal fraternity there has been growing fears as to how watertight these agreements are. Many lawyers are now worried that they themselves will be sued by disgruntled clients whose agreements haven’t stacked up in the eyes of the Court.
The Sun-Herald has reported that thousands of pre-nuptial agreements may be ruled invalid if one man’s mission to extricate himself from a multi-million dollar payment to the pole dancer he married is successful.
Lawyers are closely watching what is known in family law circles as “the pole dancing case” for its potential to disrupt every agreement signed since 2004 amid claims the legislation surrounding pre-nuptial agreements is in “disaster territory”.
The man, who was given the court pseudonym of Mr Wallace, is challenging his pre-nuptial agreement on several grounds, including that the law governing such agreements is faulty.
Mr Wallace became besotted with pole dancer Ms Stelzer after meeting her at a Sydney club around the time he separated from his first wife. They married seven years later in 2005.
The parties entered into a pre-nuptial agreement that provided that Mr Wallace would pay Ms Stelzer $3.25m if their relationship broke down within four years. They separated less than two years after they married.
Mr Wallace, who has net assets of over $16m, is now claiming the agreement is invalid. He claims that Ms Stelzer, who has just over $10,000 in assets, behaved fraudulently when she professed before the marriage that she loved him, wanted to have children with him, and spend the rest of her life with him.
Mr Wallace also provides that his original solicitor did not give him proper advice on the advantages and disadvantages of entering the agreement. His current solicitor, Trevor Hall, asserted that the weakness of the legislation meant no financial agreement signed between couples was safe. “Every binding financial agreement ever entered into is at some risk of being set aside if years later a spouse wants to suggest that the advice they received was not proper legal advice”, Mr Hall said.
In 2004, amendments were made to the Family Law Act that required solicitors to certify they had taken certain steps to ensure their clients understood their agreements. This resulted in a wave of litigation with people attempting to avoid their obligations on the basis that their lawyers had not followed those steps meticulously. In 2010, amendments were made to the Act relaxing the wording.
Mr Wallace claims the changes should not apply in his matter retrospectively as that is unconstitutional.
The appeal has alarmed the Attorney-General for its potential to affect thousands of agreements. It has appointed Senior Counsel to intervene in the matter, joining Ms Stelzer’s barrister in maintaining the agreement is valid.
Family lawyer Duncan Holmes said more people were challenging their agreements on the basis of inadequate legal advice and lawyers were concerned about their liability. “The legislation is in disaster territory”, Mr Holmes said. “Well intentioned legislation is getting corrupted and lawyers are running scared”.
In 2011 His Honour Justice Benjamin upheld the validity of the pre-nuptial agreement saying that Mr Wallace’s case was coloured by criticism of Ms Stelzer, whose evidence he preferred. “At many levels this criticism seemed to endeavour to demean her and their relationship, bearing in mind the wife’s initial occupation and the circumstances of their meeting”, His Honour said.
Mr Wallace has appealed to the Full Court of the Family Court of Australia.
As Brisbane’s leading experts in Family Law, we’re here to provide you guidance and equip you with what you need to know in prenup agreements.
Be Careful When Buying a Used Car
The Office of Fair Trading has warned consumers to beware of discrepancies between what they are promised by salespeople and what is stipulated in the contract.
A story was reported by a man who decided to buy a second-hand car at a dealership and was told by the salesman that a new car stereo would be installed at no extra cost.
The buyer signed the contract, which did not list the stereo as an extra, but was assured by the salesman that the stereo would be added to the contract later.
When he went to collect the car a few days later, he found that the stereo had not been installed as promised. He was told that the salesman he had dealt with was unavailable and the dealership manager told him, that there were no extras listed in the contract and so he was not entitled to the free installation of the car stereo.
Verbal agreements can form part of a contract but are often impossible to prove. There are also other considerations to take into account when signing a contract to buy a motor vehicle.
If you buy a car privately, you are not entitled to the normal protection of:
the cooling-off period,
you will not get a statutory warranty,
the seller is not obliged to give you a REVS certificate or Vcheck nor are they bound by the same laws and code of Conduct as licensed dealers, and
you cannot access the compensation claim fund if anything goes wrong.
Buying from a licensed motor dealer can be more expensive than a private sale, but it is often safer. All motor dealers selling used cars in Queensland must be licensed. Licensed motor dealers who sell cars privately may actually be breaking the law, and they must disclose to all intending buyers that they are licensed and provide a cooling-off period and statutory warranty.
When you buy a used car from a licensed dealer, you are entitled to:
A one business day cooling-off period,
A statutory warranty;
A guarantee of clear title on the vehicle;
Protection by the motor dealer’s Code of Conduct;
Access to a claim fund which may compensate you if you have suffered a financial loss because of the motor dealer’s actions.
First Home Owners Grant
As of the 1st July, 2000 first home buyers may qualify to receive a one off $7,000.00 grant from the Federal Government. Maybe you, your children or someone you know can take advantage of the grant!
There appears to be a lot of confusion and misinformation about who is eligible for the grant. For example, I had a client who was informed by her Bank Manager that she was not eligible for the grant because she was not buying a “new” home. Wrong!
Lets have a look at some of the requirements for eligibility.
- For a person to be eligible for the grant they must:-
- Be buying or building their first home.
- Enter into a Contract to buy an existing home or build a new home on or after 1 July, 2000.
- Be an Australian Citizen or permanent resident.
- Intend to reside in the home as their principle place of residence.
- Start living in the home within a reasonable time.
Other points to know are:-
- The payment is not means tested.
- Trusts and Company’s are not eligible for the grant.
- The payment will be made regardless of where the person buys or the value of the home they are buying/building.
- It applies to both new and established homes.
- It does not apply to holiday houses or investment properties.
There are some catches to eligibility so it is vitally important you speak with a person who knows what they are talking about.
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