Welcome to Part 4 of our comprehensive ’30 Tips for First Home Buyers’ series, where we shine a spotlight on the invaluable government assistance programs available to first-time homebuyers. Navigating the property market for the first time can be daunting, but various federal and state initiatives are designed to make this journey more accessible and affordable. This segment delves into crucial schemes such as the First Home Buyers Grant, stamp duty concessions, and the First Home Guarantee program. These programs offer significant financial benefits, from grants and duty exemptions to the opportunity to purchase with a smaller deposit, potentially fast-tracking your entry into the housing market. Whether you’re looking to buy in Victoria or elsewhere in Australia, understanding these assistance programs could save you thousands and bring your dream home within reach sooner than anticipated.

The Federal and State Governments provide several forms of assistance for First Home Buyers.  Whilst these programs will not be helpful or available to every first home buyer, those that are able to take advantage of what is on offer are able to save some significant money which has the impact of allowing them to get into the market years earlier than they otherwise would.

Tip 17: Government Assistance – First Home Buyers Grant

Over the years the size of the First Home Buyers Grant (FHOG) and the criteria to qualify for it have changed a lot.  

In Victoria, as of March 2024, if you purchase a new property (off the plan or otherwise never lived in before) for no more than $750,000 you may be able to claim a $10,000 First Home Owners Grant. 

To be eligible for the grant you must never have owned a home before, you must be an Australian citizen or Permanent Resident, and you must move into the property within 12 months and live there continuously for at least 12 months. Click here for more details.

The FHOG is a Federal scheme administered state by state so there are grants available across Australia but the criteria/eligibility varies from state to state.  If you are looking to buy outside Victoria you can check the criteria for the other states here

These days other concessions for First Home Buyers are more valuable and more widely available.  But, if you are buying a new home off the plan it is handy.

Tip 18: Government Assistance – Stamp duty concessions for FHB’s

In Victoria, a more widely accessed government assistance program is the stamp duty exemption for First Home Buyers on the purchase of a Principal Place of Residence for under $600,000. 

Above $600,000 up to $750,000 stamp duty starts to apply in increasing amounts until full stamp duty is payable at $750,000. 

The eligibility criteria for this assistance is the same as for the FHOG so you must never have owned a home before, you must be an Australian citizen or Permanent Resident, and you must move into the property within 12 months and live there continuously for at least 12 months. Click here for more details.

Stamp duty on a $600,000 purchase for non FHB’s is $31,070 so the waiver is a significant benefit and as a result many first home buyers seek to buy for under $600K or as close to that mark as possible.

As Stamp Duty is a state tax, the benefit offered to FHB’s vary from state to state.

Tip 19: Government Assistance – First Home Guarantee program

Another program that has helped many of our First Home Buyer clients is the First Home Guarantee program

This program allows First Home Buyers to borrow up to 95% of the purchase price without incurring Lender’s Mortgage Insurance, potentially saving the purchaser up to $28,500 and allowing them to buy a first home with as little as a 5% deposit. 

There are a range of criteria to qualify. 

  • Applicants must be 18+ years old and Australian citizens or permanent residents;
  • Applicants must be first home buyers or not have owned property in Aust for more than 10 yrs;
  • Applicants must intend to live in the property
  • There is an income test – Individuals must not earn more than $125,000 pa and joint applicants must not earn more than $200,000.  Income is assessed off the Notice of Assessment for the year immediately beforehand (in other words FY2023 presently); and
  • There is a property price cap – If you buy in Melbourne or Geelong the max property price is $800K.  In regional Victoria the cap is homes up to $650,000. Price caps vary by capital city/region. See here for the property price caps around Australia.

Some lenders also require that the applicants can demonstrate they hold 5% of the purchase price as genuine savings (rather than a gift or borrowed funds)

For more useful tips for first-time buyers, check out part one of our 30 tips For First Home Buyers here, part two here, part three here and our First Home Buyer page in the knowledge centre here.

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