Young Australians use tax refund to pay for a home
30 September 2015 Alice Bradley
A large percentage of the taxman’s dollars will be used to boost the housing market this year.
Almost a quarter of Australian taxpayers will be using their tax refund to pay off a mortgage.
Young adults are especially keen to cash in their tax return to get ahead in the property game, a homeloans.com.au survey found.
The 18-24-year-old demographic are committed to strengthening their foothold in the property market, with more than 15% planning to put their tax refund towards a home deposit. The same number are earmarking the money for mortgage reduction, having already purchased a home.
Another third of young people plan to invest or save the money.
Shopping sprees and cars were less of a concern, accounting for less than 5% of plans for tax refunds overall.
The findings come at a time when home prices are reaching all-time highs and housing affordability in Australia is being questioned.
homeloans.com.au Marketing Manager Will Keall says people are trying to be more careful with their money.
“Because property prices have continued to increase throughout the nation and perceived affordability has become more restrictive, people know it’s tough and know that they have to be prudent.”
Keall says 18-24 year olds are not usually in a position to buy when they first come into contact with brokers, but they’re definitely planning ahead.
“The average age for purchasing your first home is 25 and four months,” Keall says.
“Those that do successfully get in (to the market) are prudent and open to suggestions on how to get there.
“There are some that are keen to get in as soon as they can, and that may not be in their best interest. They may not have a substantial deposit, or will settle for a less-than-perfect property.”
Keall says younger buyers should avoid falling into the trap of diving into the property market under-prepared.
“There’s been a lot of publicity in the last 12 months about median property prices and young people are paying too much attention to it. Someone who’s just coming to the market is unlikely to pay middle of the road.
“Median house price is the best barometer to use when talking about house prices, but not when you’re talking about Gen Y.”
13 August 2015