In addition to rock bottom interest rates, there are several schemes that first home buyers could use to their advantage. Here’s the list of federal and state government incentives every first home buyer should be well versed with.
First Home Loan Deposit Scheme
Launched at the beginning of 2020 by the federal government, with this incentive, a first home buyer can procure a property with a deposit that is as low as 5% of the property value. Generally, lenders opt for LMI (Lender Mortgage Insurance) to protect themselves from defaults in case of mortgages with a deposit of less than 20% of the property cost. The cost of LMI is usually passed to the borrower resulting in larger mortgage-repayments. Under this scheme, the federal government bears the cost of the LMI allowing first home buyers the chance at a property with a lower deposit amount at the approximate cost of a regular mortgage (that doesn’t have an LMI).
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This $688 million package grants $25,000 for renovation or building of a new home (applicable for Australian citizens including first-home buyers). Some eligibility criteria include
- The grant is available for owner-occupied properties (investment properties are ineligible)
- The price cap for a new home construction is $750,000, and construction must commence within three months of awarding of a contract.
- The Renovation cost range has been set between $150,000 to $750,000 for properties with a value of no more than $1.5 million. The grant can be used to improve liveability, safety and accessibility. Examples include kitchen and bathroom renovations through licensed contractors. Add-ons like swimming pools, tennis courts, outdoor spas and saunas, and detached sheds or garages are therefore ineligible.
- Available to singles with a yearly income of $125,000 and couples earning $200,000
First Home Super Saver Scheme
This scheme lets first-home buyers save as much as $30,000 for a home deposit through superannuation contributions with a cap of $15,000 per financial year. The government taxes these contributions at a lower rate allowing first home buyers to accumulate a home deposit faster.
State wise Scheme
|First Home Buyer Assistance||No stamp duty for properties costing up to $600,000 and 50% exemption for properties up to $750,000. |
* Always check the government web site for most up to date information
|First Homeowner Grant||$10,000 grant for new properties worth less than $600,000.||https://www.sro.vic.gov.au/fhogapply|
New South Wales
|First Home Buyer Assistance||No stamp duty for properties and land costing up to $650,000 and $350,000 respectively. Reduced stamp duty for property and land costing up to $450,000 and $800,000 respectively||https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/assistance-scheme|
|First Homeowner Grant||$10,000 grant for new properties worth less than $600,000 and owner-builder/building contracts costing less than $700,000. In case of new construction on land the cap is $750,000.||https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/first-home-owners-grant-new-homes-scheme |
|Stamp Duty||No stamp duty for properties costing up to $500,000||https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/qld-first-home-grant/apply-first-home-grant|
|First Homeowner Grant||$15,000 grant for new properties costing up to $750,000.||https://www.qld.gov.au/housing/buying-owning-home/financial-help-concessions/qld-first-home-grant/apply-first-home-grant|
|First Homeowner Grant||$15,000 grant for new properties costing up to $575,000.||www.revenuesa.sa.gov.au/grants-and-concessions/first-home-owners|
|Stamp Duty||No stamp duty for properties costing up to $430,000 and reduced stamp duty for properties costing up to $530,00||https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/assistance-scheme|
|First Homeowner Grant||$10,000 grant for any first home buyer||https://www.wa.gov.au/organisation/department-of-finance/fhog|
|Home Buyer Concession||No stamp duty for certain low-income households that haven’t owned property in the past two years||https://www.revenue.act.gov.au/home-buyer-assistance/home-buyer-concession-scheme/home-buyer-concessions-from-1-July-2019#income|
|Stamp Duty||50% stamp duty exemption for properties costing up to $400,000||https://www.sro.tas.gov.au/first-home-owner-grant|
|First Homeowner Grant||$20,000 grant for any first home buyer||https://www.sro.tas.gov.au/Documents/FHOG-Guideline17.pdf|
|Stamp Duty||Stamp duty reduction of up to $18,601 for homeowners who haven’t owned property for the past two years||https://nt.gov.au/property/home-owner-assistance/first-home-owners/first-home-owner-discount|
|First Homeowner Grant||$10,000 grant for first home buyers||https://nt.gov.au/property/home-owner-assistance/first-home-owners/first-home-owner-grant|
Finance Circle Group
Nirosh Weerasinghe 0401 976 188
Chamila Suraweera 0402 927 220
Shane Cross 0421 427 272