How Stage Three Tax Cuts Could Boost Your Home-Buying Power

Fresh research from market analysts reveals that the upcoming stage three tax cuts might significantly enhance homebuyers' borrowing capacity. Here's how:

• For an individual earning $80,000 annually: With $1,600 less in income taxes, they could borrow an additional $18,000, increasing their home-buying budget from around $492,000 to about $513,000 (assuming a 20% deposit).
• For someone earning $140,000 annually: Their borrowing capacity might rise by $38,000, pushing their budget up to $925,000, plus an extra $47,000 with a 20% deposit.

Key Insights:

1. Increased Market Accessibility:

• Borrowers could have more options in national real estate markets.
• A $70,000 earner could access a greater percentage of units in major cities, from 25% to 27% in Melbourne and 13% to 14% in Sydney.
• Buyers willing to be flexible with their city of residence could benefit significantly, e.g., a $70,000 earner could purchase over 50% of apartments in Perth in 2024–2025.

First-Time Home Buyer Benefits:

• A first-time buyer earning $100,000 could see their borrowing capacity rise from $525,000 to $547,000, increasing their purchase price range from $657,000 to $685,000 (with a 20% deposit).
• In Queensland, with a $30,000 first-home buyer grant, the total transaction cost could go up to $715,000.

Relief for Mortgage Holders:

• The tax cuts could provide financial relief to many struggling with mortgage payments, potentially lowering the percentage of at-risk mortgage holders from 30% to 29%, even if the Reserve Bank of Australia increases the cash rate.

Conclusion:

These tax cuts could provide much-needed relief and open up more opportunities for homebuyers across various income brackets. For existing mortgage holders, the reductions could ease financial stress, even amid potential interest rate hikes.

With upcoming tax cuts boosting borrowing power, now’s the time to act! Call us at 0405 593 807 to book a consultation today. For more assistance, schedule an appointment at https://team.nfinityfinancials.com/paragdixit/ We're here to support you every step of the way!