18 Dec First Home Buyer Grants & Discounts
UPDATED JUNE 2020
With property prices rising across many of Australia’s property markets, it is becoming increasingly difficult for some first home buyers to get their foot on the property ladder.
Thankfully however, some of the state governments have come to the fore, offering first home buyers various incentives to help them achieve their goals of property ownership sooner rather than later.
Here we offer a breakdown of the various grants and discounts available to first home buyers in Australia:
- FIRST HOME BUYERS GRANT
- STAMP DUTY CONCESSIONS
- FIRST HOME LOAN DEPOSIT SCHEME
- FIRST HOME SUPER SAVER SCHEME
- HOME BUILDER / RENOVATOR GRANT
The First Home Owner Grant (FHOG) is a lump sum of cash given to first home buyers who are buying or building a new home. Although it is a national scheme, the grant is funded by the states and territories, so the amount differs on where you are buying. Each state government also has its own conditions, but the general rules are:
- You must be a first home buyer as a person, not as a company or trust.
- At least one applicant must be a permanent resident or Australian citizen.
- Each applicant must be at least 18 years old.
- You or your spouse, partner or co-purchaser must not have previously owned an interest in land in Australia which had a residence on it, before 1 July 2000.
- You or your spouse or partner cannot have lived in a residential property which you owned from 1 July 2000.
- You or your spouse, partner or co-purchaser may not have claimed the grant previously.
- You must occupy your first home as your principal place of residence within 12 months of the construction or purchase of your home and the minimum period of occupancy is 12 continuous months.
- There are other state-specific conditions as well, which will depend on the state you’re buying in.
Stamp duty is a government tax imposed on transactions like real estate and can be a significant barrier for anyone buying property. If you are a first home buyer in Australia, it can add an extra cost you aren’t ready for.
Fortunately, many stamp duty concessions exist for first home buyers allowing a first home-owner to be exempt from paying any stamp duty if they meet the requirements. The amount is usually calculated as a percentage of the sale price and varies depending on State or Territory:
VIC First Home Buyer Concessions
If you’re a first home owner in Victoria, you won’t have to pay any stamp duty if your property is valued at less than $600,000 and you entered into your contract after 1 July 2017. First home owners buying properties valued between $600,001 and $750,000 also receive a concessional discount on a sliding scale.
NSW First Home Buyer Concessions
In New South Wales, first home buyers do not pay stamp duty on property up to $650,000. The government also provides a concessional discount for properties between $650,001 and $800,000.
QLD First Home Buyer Concessions
In Queensland, first home buyers are exempt from stamp duty for purchases of established homes up to $500,000. A concession is then applied on a sliding scale for properties up to $600,000.
SA First Home Buyer Concessions
Unlike most States and Territories, South Australia does not currently offer any stamp duty concessions or exemptions for first home buyers.
WA First Home Buyer Concessions
In Western Australia, first home buyers are exempt from paying stamp duty on home purchases up to $430,000. There are concessional discounts available on homes valued between $430,001 and $530,000.
NT First Home Buyer Concessions
In the Northern Territory, first home buyers are exempt from paying stamp duty up to $500,000, with concessional discounts up to $650,000.
ACT First Home Buyer Concessions
As of 1 July 2019 in the ACT, no duty is payable on a purchase if the total gross income of home buyers (including if any partner) is below $160,000, and all buyers have not owned property in the last two years. At least one of the owners must live in the property for 12 months.
TAS First Home Buyer Concessions
In Tasmania, there is a concession that provides a 50% discount on stamp duty for first home buyers of established homes, with a value of $400,000 or less. The discount is only available for purchases of established homes within specific dates.
The First Home Loan Deposit Scheme allows buyers to take out their first home loan with a deposit of 5%. The government will act as a guarantor on the remaining 15 per cent for individuals earning up to $125,000 a year or couples earning $200,000 a year.
The Scheme allows borrowers to avoid paying Lenders Mortgage Insurance and it is only available to the first 10,000 first home buyers who apply and have already saved at least 5% of their property purchase price.
Property type and price thresholds vary depending on states and territories, as well as capital cities and regional centres.
If you’re looking to buy your first home sometime in the next decade, the government’s First Home Super Saver Scheme (FHSS) is an absolute no-brainer.
The FHSS allows buyers to put money into superannuation taxed at the rate of 15%, compared to 45% if you are a high income earner and then take it out to buy a house. Home buyers can make voluntary contributions to super of up to $15,000 in any one year, and then up to a maximum of $30,000 over the duration of the scheme. This means that a couple can effectively save a total of $60,000.
As you would expect, there are rules relating to both eligibility and the contributions.
To qualify you must be over 18 and not have previously owned property in Australia, either live or intend to live in the property you are buying as soon as practicable, and intend to live in the property for at least six months of the first 12 months you own it, after it is practical to move in.
Keep in mind, if you put money into the scheme and never buy that first property, then the money will be stuck in super until you turn at least 60 years of age. And it may earn a sub-optimal rate of return. Therefore, if you are a savvy investor and can consistently earn a double digit rate of return by investing in higher risk assets such as shares, you may be better saving outside this scheme.
As you can see there are lots of great discounts and incentives to help first home buyers to get into their new home faster. But before you get too excited, there are lots of rules around eligibility.
We’re here to help first home buyers navigate the home loan journey confidently. We do all the research, compare hundreds of home loans and rates to find you the right one, as well as complete all the paperwork and submit to the lender on your behalf. The best part? Our home loan service is no cost to you.