Thursday December 17 2020

First home buyer grants and schemes

*Before we get into things, this post is a bit of a long one. So, here are some quick links to help you find exactly what you’re looking for:

National Grants + SchemesNSW Grants + SchemesACT Grants + SchemesVIC Grants + SchemesQLD Grants + SchemesNT Grants + SchemesSA Grants + SchemesTAS Grants + SchemesWA Grants + Schemes

Hey there first home buyer! Whether you’re looking to build, buy or something in between, discover what grants and schemes are available for you both nationally, and, in your state.

We love helping people buy their first homes, and purchasing a home is still #goals for many of us, even during the pandemic. While property prices in Australia’s capital cities might have made homeownership seem unattainable, with the right plan and the right help in place, it might be possible to make the leap sooner than you think. At both a state and federal level, governments around Australia have introduced a range of financial assistance schemes to assist eligible first-home buyers to get into the property market.

First Home Buyer Grants and Schemes | National

Country-wide, there are a range of national schemes and grants available for first-home buyers. So, let’s break them down...

First Home Loan Deposit Scheme (New Homes)

One thing that stops many people from trying to get into the property market is that they are overwhelmed by the prospect of saving a big deposit. Without help from the bank of Mum and Dad, an inheritance, or an extremely well paying job, it can be almost impossible to save a lump sum big enough. And we know that those things are not necessarily within reach for the vast majority of Australians.

Enter: The First-Home Loan Deposit Scheme or ‘FHLDS’ (such a catchy acronym 😳). This Scheme allows eligible first home buyers to purchase a property with just a 5% deposit, and without needing to take out Lenders Mortgage Insurance (LMI), which you normally would have to with a deposit less than 20%. That’s because the National Housing Finance and Investment Corporation (or ‘NHFIC’, another super catchy acronym 🙄) ‘guarantees’ up to 15% of the value of the property for you.

🚨 Jargon alert: A ‘guarantor’ is a financial term that describes someone who promises to pay your debt in the event that you default on, or are unable to pay, the loan. They have to pledge their own assets as ‘collateral’, which is a confusing way of saying that they have to show the bank that they can actually pay the debt by putting up other things they own. Learn more about guarantors here.

Before you count your chickens, there are a couple of things to consider before applying for the FHLDS

  • Are you eligible? There are some hoops to jump through including an income test, prior property ownership test and deposit requirement test (5%). Use this online eligibility tool to see if you meet the basic criteria. 
  • Are you going to apply as a single or a couple (if you’re in a relationship). Why does it matter? Because once a place has been reserved in your name (either as a single or a couple), it can only be changed if you withdraw or start a new application. 
  • Have you got a Notice of Assessment from the Australian Tax Office ready to show your taxable income for the previous financial year? (If you’re applying during the 2020/21 financial year, you’ll need a 2019/20 Notice of Assessment.)
  • There are limited places available with 10,000 places in the scheme released each financial year (1 July to 30 June). Good news is that, as part of the most recent Federal Budget, the government increased the number of places to add an extra 10,000 places for the 2020/21 financial year and revised the property price caps.

To apply for the First Home Loan Deposit Scheme, you can:

  1. Go directly through one of the 27 participating lenders, or 
  2. Get the help of your favourite mortgage advisers (👋 )

Want to dive deeper into the First Home Loan Deposit Scheme?

First Home Super Saver (FHSS) Scheme 

Did you know that you can now make voluntary contributions into your super to help save for your first home? Rad! The First Home Super Saver (FHSS) Scheme was created a few years ago to allow eligible first home buyers to save for a deposit inside their superannuation account. Basically, it involves sacrificing some of your pre-tax income and putting it into your super fund to lower the amount of tax you pay, and therefore freeing up more funds to put towards buying your first home. 

When the policy was announced, the Government stated that under the FHSS Scheme first home buyers would be able to “accelerate their savings by at least 30%”. But there are, of course, caps on how much you can contribute as part of the Scheme with limits of up to $15,000 a year (and $30,000 altogether), and you can’t release any of the contributions made by your employer (as part of the Superannuation Guarantee) or a spouse, under the Scheme.

So, what’s the benefit of doing it this way? It’s all about those tax savings. Concessional super contributions (a.k.a. contributions made from your income before it’s been taxed) are usually taxed at a lower rate (15%) than your marginal tax rate (which changes depending on how much you earn). Plus, you can access any earnings or interest you make on these extra contributions as well. Find out more about using your super to save for your first home and don’t forget to see if you’re eligible for the FHSS Scheme.

HomeBuilder Grant 

To help stimulate the economy following the impacts of COVID-19, the Government launched another Scheme for owner-occupiers and first home buyers. Known as HomeBuilder, the program offers a grant of $25,000 to help people build a new home (valued up to $750,000) or substantially renovate an existing home (valued between $150,000 and $750,000). Though it’s unlikely that many first home buyers will fit into the latter category because you’re likely pouring what money you have into buying the home or land itself, it’s great to know that this ‘limited-time-only’ program is available for those who sign building contracts between 4 June and 31 December 2020. There are different application processes for each state and territory, so be sure to find out more about the HomeBuilder Grant.

Family Home Guarantee

As a part of the 2021 budget, the federal government announced a new scheme called the Family Home Guarantee to help support housing affordability and give assistance to single parents with dependants. The scheme allows the eligible parent to either build a new home, or purchase a new or existing home, and isn't limited to first home buyers. Under the scheme, a single parent will be able to purchase a property with a 2 per cent deposit, with the government guaranteeing another 18 per cent of the value of the loan. From 1 July 2021, the scheme has 10,000 placements and will be spread over four years, averaging 2,500 single parents a year and will be subject to property price caps. Find out more about the Family Home Guarantee here.

Along with these nationwide schemes, each state and territory offers a range of specific grants that can help you get your foot in the property door. And the good news is, you can often take advantage of them in conjunction with the Federal schemes.

First Home Buyer Grants and Schemes | NSW

First-Home Owners Grant (New Homes)

Thinking about buying or building your first home? Take advantage of the NSW Government’s First-Home Owners Grant (New Homes). The scheme offers a $10,000 grant to first homeowners who choose to buy or build a new home, even if you have also applied for the federal schemes.

To qualify, you must purchase a new property that is $600,000 or less in value. Or, if you’re buying land to build a new home, the total price must not exceed $750,000 (for the land and the home). Check if you meet the eligibility requirements for the First-Home Owners Grant (New Homes).

First-Home Buyer Assistance Scheme

You’ve likely heard of stamp duty, but in case it’s new to you - it’s essentially a state tax imposed on certain transactions, such as car registrations, mortgages and property transfers. Lots of things impact if, and how much, stamp duty you’ll need to pay, including the price of the property and how you’ll use it. It’s often one of those costs that first home buyers don’t account for and it can be a nasty surprise. 

So, along with the First-Home Owners Grant, the NSW Government also offers stamp duty concessions for eligible first-time buyers across a range of properties (both new and existing). The First Home Buyer Assistance Scheme helps first home buyers save big on stamp duty, with different savings thresholds depending on the type of property you’re buying, the cost of property and/or land, and when you’ve purchased the property and/or land.

The First Home Buyer Assistance Scheme is available to first-home buyers:

  • Buying an existing home
  • Buying a new home 
  • Buying vacant land with the goal to build a home
  • Buying a home they will move into within 12 months of purchasing, and stay living there for a consecutive 6 months

From August 1st, 2020, the NSW Government has increased the caps for purchasing new homes and vacant land to build new homes as part of the scheme. That means from now until July 31st, 2021, eligible first home buyers will pay no stamp duty on new homes valued up to $800,000 (with discounted stamp duty rates available for new homes valued between $800,000 and $1 million). Plus, if you’re thinking of purchasing vacant land up to $400,000, you won’t pay stamp duty (with discounted stamp duty rates available for land valued between $400,000 and $500,000). 

To find out how much stamp duty you’ll pay and to see the eligibility requirements for the First Home Buyer Assistance Scheme, head here. 

First Home Buyer Grants and Schemes | ACT

Home Buyer Concession Scheme 

The Australian Capital Territory replaced the First Home Owners Grant with the Home Buyers Concession Scheme in 2019. So, while not specifically for first home buyers, the ACT Government’s Home Buyer Concessions can help you avoid paying stamp duty on your first abode. If you haven’t owned a property in the past two years and your total gross household income is below the threshold (e.g. less than $160,000 with no dependents), then you’ll be able to access free stamp duty. 

This scheme is available for all properties across the ACT, giving you greater flexibility when buying your first home. Want to find out if you’re eligible and make a claim? 

First Home Buyer Grants and Schemes | VIC

First-Home Owner Grant 

To help Victorians secure their first home, the First Home Owner Grant offers $10,000 to buy or build your first new home, or $20,000 if you’re planning to build your first home in regional Vic (available for properties valued up to $750,000). To find out more about the FHOG grant, visit: 

Stamp Duty Exemption

First-home buyers can also score a stamp duty exemption in Victoria if they buy a property (old or new) up to $600,000. If you’re buying in the $750,000 range, you are eligible for a 50% stamp duty concession instead. Like to find out more about the Stamp Duty Exemption? 

First Home Buyer Grants and Schemes | QLD

First-Home Owner Grant 

To help Queenslanders secure their first home sooner, the Government has created the First-Home Owner Grant. Under this scheme, you’ll receive a $15,000 grant towards buying or building your new home (as long as it’s valued less than $750,000). There’s also an additional $5,000 on offer if you buy or build a new house, unit or townhouse valued at less than $750,000 in regional QLD. To find out more and to check your eligibility, head over here Queenslanders

Stamp Duty Concessions

For Queenslanders purchasing their first home (valued under $500,000), you may be eligible for a stamp duty exemption. Yahoo! There are also other stamp duty concessions available depending on the type of home or land you purchase (vacant land or existing property. Find out more about saving on stamp duty in the Sunshine State. 

First Home Buyer Grants and Schemes | NT

First-Home Owner Grant 

For all of you considering buying or building your first home in the NT, here’s something to make you smile. You can access a grant of $10,000 as part of the First-Home Owner Grant. Aaaaand, if that home is less than $650,000, you can also apply for up to $23,928.60 off stamp duty as well. 

Household Goods Grant Scheme

Furnishing your first home can be expensive, so this Scheme can come in handy. This scheme offers a grant of up to $2,000 to buy household goods (such as appliances, furniture, kitchenware, couches) for first-home buyers who have purchased a new home. Ready to deck out your new dream home? Find out if you’re eligible for the Household Goods Grant Scheme.

BuildBonus Grant 

To help Territorians enter the property market, the BuildBonus grant was created. From February 2019, anyone buying or building a new home can apply for a grant of $20,000. While not targeted specifically at first-home buyers, the scheme offers a big leg-up for those looking to secure a new home. Find out more about the BuildBonus grant if you think you fit the bill. 

First Home Buyer Grants and Schemes | SA

First-Home Owner Grant

To help South Australians secure their first home, RevenueSA has created a First-Home Owner Grant. The grant offers a grant of up to $15,000 for new properties valued at $575,000 or less, but unfortunately there are no stamp duty exemptions or concessions for first home buyers in the Festival State. Think you’ll make the cut? Take a look at the First-Home Owner Grant in SA

First Home Buyer Grants and Schemes | TAS

First-Home Owners Grant 

For Tasmanians purchasing their first home, the First-Home Owner Grant offers up to $20,000 to fund their purchase. However, this grant is only available to first-home owners who buy or build a new property. Find out if you’re eligible for the Tassie First-Home Owner Grant

Stamp Duty Concession

Are you thinking of purchasing an established property as your first home in the great island state of Tasmania? You can access a 50% discount on stamp duty, as long as your first home is valued at $400,000 or less. For more, jump on the State Revenue Office of Tasmania’s website.

First Home Buyer Grants and Schemes | WA

First-Home Owner Grant 

Are you a first-home buyer purchasing or building a new home in the great state of Western Australia? Whether it’s near the beach, bush, or in a beautiful suburb - be sure to take advantage of the First-Home Owner Grant, which offers a one-off payment of $10,000 to help fund your purchase. To find out what property value limits and eligibility criteria for first-home buyers in WA, swim over here. 

Concessional Duty

If you’re eligible for the First-Home Owner Grant, then you might also be able to receive a stamp duty concession. Great news! The First Home Owner Rate of Duty means you may be exempt from stamp duty if your property is valued less than $430,000, or you may qualify for reduced stamp duty if your home is valued less than $530,000. West Aussies, see if you’re eligible for the Stamp Duty Concession.

Phew, that's a lot of info! While getting into your first home can seem like a daunting task, these grants and schemes are designed to make the process a little less so. Now you know what's available nation-wide, and in your state, you can check to see if you’re eligible. And, because the goal posts are moving all the time, and because everyone’s circumstances are a little different, it is also a great idea to have a chat with your bank or your friendly neighbourhood mortgage adviser (hi, again!), and you’ll be well on your way towards owning your first home.

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