Getting into the property market is a challenge but the right kind of loan, coupled with first-time buyer incentives, can make it easier
Sophie, 29, earns $120,000 a year plus super. Because of employment opportunities, a few years ago she moved away from home and has been renting with a friend. She has been a good saver over time, using an account set up years ago by her parents when she was in school.
Although she earns good money and is a good saver, she is financially naive about managing her financial situation more effectively. She has not compared interest rates, bank accounts or any money strategies, as she has been satisfied with her savings regime.
Sophie does have car insurance but she has no other insurances, such as private health cover. Her main goal is to get into the property market and now she wants to make a concerted effort to buy a property, either to live in or as an investment.
Three key tips for Sophie are:
1 Health fund cover
Sophie should contact health funds to compare the type of cover that would be suitable for her. She shouldn’t get cover for conditions or items she doesn’t need. There is a penalty for people aged over 30 who do not hold private health insurance hospital cover. For each year over 30, a 2% loading (cumulative) is added to the premium up to a maximum of 70%. Health funds are required to charge different premiums based on the age of each member, depending on when they first took out private insurance.
Also, Sophie should note that there is a Medicare levy surcharge, which is levied on taxpayers who do not have private health insurance. With Sophie’s current income, she would have an extra 1.25% applied to her, above the 2% Medicare levy. Having private health cover actually provides two financial benefits.
2 Buying her first home
Esta historia es de la edición July 2017 de Money Magazine Australia.
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