There are multiple Government Grants available to First Home Buyers and some Grants are also available regardless of whether it is your first property or subsequent property you have purchased. All have eligibility criteria and dates that you need to apply by and these must be strictly followed to receive these grants.
Some of these Grants are administered at State level and therefore can vary from State to State. Others are at Federal level and are the same for everyone throughout Australia. In most cases you need to be an Australian Permanent Resident to take advantage of these Grants. In some cases you need also to be an Australian Citizen.
How you apply for each of these Grants also differs for each one. It is no wonder it gets confusing!
I have put together a summary of each of these Grants, the eligibility criteria, timings and how you apply. This is a very much abbreviated version and just provides a high level summary. For more information I have listed the links to the State or Federal website where it goes into more detail.
The criteria and what is available also do change regularly so you should reference these sites to get the most up to date information.
I am also always more than happy to answer any questions you may have.
1. Stamp Duty Exemption Stamp Duty Exemptions are State based. Therefore the Stamp Duty payable varies depending on where you live in Australia. State Governments update these costs often, depending on state budgets and tax policy.
Each state and territory has its own conditions but there are some common aspects to each and they are as follows:
Stamp Duty Exemptions are organised through your Conveyancer.
Stamp duty is waived for first home buyers on homes worth up to $600,000. Discounts on duty are available on a sliding scale on first homes costing between $600,001 and $750,000.
In addition a land transfer (stamp) duty waiver of up to 50% on purchases of residential property in Victoria with a dutiable value of up to $1 million applies to contracts entered into on or after 25 November 2020 and before 1 July 2021. This applies to all property purchases not just FHBs.
Australian Capital Territory
There are concessions available on stamp duty, which are tied to income thresholds and number of dependants.
To be eligible to pay no duty, the total gross income of all home buyers and their partners (if any) over the full financial year before the transaction date must be less than or equal to the thresholds below.
Your partner’s income must be included, even if they won't be owner of the home.
Nbr dependent children Total gross income threshold
5 or more $176,650
New South Wales
Under the NSW Government’s Affordability Package, first home buyers pay zero stamp duty for new or established first homes priced up to $800,000.
Stamp duty concessions of up to $18,601 may be available to eligible first home buyers of an established home.
Queensland has first home concessions for FHB’s and home concessions which apply to all this purchasing a property as long as it meets the eligibility criteria (i.e. you do not have to be a FHB)
Stamp duty discounts are available on both new and established homes. The maximum concession of $8,750 applies to homes valued up to $504,999, falling to $875 for a home costing $549,999. First home buyers planning to buy land now and build later pay no duty on vacant land costing $400,000 or less.
There are three types of concessions and they are:
The home concession rate applies to the first $350,000 of the consideration or value of the residence, and the general transfer duty rates then apply to the balance.
You can claim a home concession for transfer duty when acquiring a residence, as long as you meet certain requirements. If you are eligible, you will pay a reduced amount, saving you up to $7,175.
Unlike the first home concession, you can claim the home concession even when you have owned a home before.
First home concession
The first home concession only applies to a home valued under $550,000 and can save you up to $15,925. The home concession may still apply for a home valued over $550,000.
You can claim a first home concession for transfer duty when acquiring your first residence if you meet certain requirements.
You do not have to be an Australian citizen or permanent resident to claim either of these two concessions, but you must meet the eligibility criteria. Additional foreign acquirer duty may apply if you are a foreigner.
South Australia currently offers no stamp duty concessions or exemptions for first home buyers. Additionally, since 1 July 2018, there is no concession or exemption for buyers who purchase property off-the-plan.
Tasmania does not offer concessions or exemptions on transfer duty to pensioners or first home buyers.
WA first home buyers are exempt from stamp duty when they buy a new or established home worth up to $430,000 or vacant land costing up to $300,000. A discount on duty applies to vacant land or a home costing up to $400,000 and $530,000 respectively.
2. First Home Owner Grant (FHOG) The First Home Owner’s Grant (FHOG) scheme is a state governments’ initiative to help first home owners purchase their first home.
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.
Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
The property needs to be a new property you have bought or are building. There are caps on the maximum value and this varies by State.
Again each state and territory has its own conditions but eligibility is similar to that of the Stamp Duty concessions mentioned above.
More information by state or territory please refer to http://www.firsthome.gov.au/
The FHOG is applied for through your lender or broker. These funds can be used as funds to complete the purchase but please note that these are not usually enough to cover what is required to cover the costs of buying your first home.
A $10,000 First Home Owner Grant (FHOG) is available in Victoria when you buy or build your first new home.
The FHOG is $20,000 for new homes built in regional Victoria, for contracts signed from 1 July 2017 to 30 June 2021.
Australian Capital Territory
From 1 July 2019 the FHOG will change. Eligible applicants who enter into a transaction with a commencement date on or after 1 July 2019 will not be entitled to the FHOG payment.
New South Wales
As a first home buyer in NSW, you may be eligible for $10,000 under the first home-owner grant which applies to new homes only.
If you're building or buying a new home in the Northern Territory (NT), you may be eligible for the Build Bonus grant.
Build Bonus was introduced in February 2019 to help Territorians fulfil their dream of building their new home.
If you are buying or building a new home you can apply for a grant of $20,000. The Build Bonus grant is available to Territorians regardless of prior ownership. However, this grant is limited to the first 600 applications.
Queensland First Home Owners’ Grant
The Queensland First Home Owners’ Grant provides first time home buyers, if eligible, $15,000 towards buying or building your new home.
In additional there is the Regional Home Building Boost Grant. If eligible, you’ll also get $5,000 on the completion of your purchase or the construction of your brand-new house, unit or townhouse valued at less than $750,000.
The FHOG is currently $15,000 in South Australia for eligible home buyers purchasing a new only residential property.
The first home owners grant: A one-off payment of $20,000 for Tasmanians. Essentially, the Tasmanian FHOG provides first home buyers with a one-off payment of $20,000. However, to be entitled to it, you first need to meet certain criteria. You must be buying or building a new home.
The First Home Owner Grant in WA is worth $10,000 for the purchase or construction of a new home.
3. First Home Super Saver Scheme (FHSSS)
It’s not easy to save the 5% minimum deposit needed to purchase a property. This scheme is designed to allow FHBs to save money inside their superannuation fund for a deposit toward a first home.
It works by using superannuation’s tax breaks to give your deposit a boost. You can make voluntary contributions to a maximum of $15,000 in any one financial year, and up to a maximum total of $30,000. You can salary sacrifice these contributions into your super account so they come from your pre-tax income. This means you’ll avoid being taxed for making deposits.
You might even earn a higher return on the deposit money as the return on a super account is generally higher than a regular savings account.
You then withdraw this extra amount, plus earnings, less tax when you are ready to buy. When you withdraw funds, you’ll be taxed at a marginal rate less a 30% offset.
Because you’re saving through super, you pay less tax than saving outside of super, meaning you can save your deposit quicker. The maximum that can be released from your Superannuation for this purpose is $30k.
More information about this scheme can be found on the ATO website www.ato.gov.au
4. First Home Loan Deposit Scheme (FHLDS) and New Home Guarantee – Federal Government Scheme
The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner. It aims to help buyers gain access to finance without saving a 20% deposit.
Currently, if you do not have 20% deposit to purchase your home, you will be hit with Lender Mortgage Insurance (LMI), which can be very expensive (e.g. if you only have 5% and want to buy a $500k house, LMI would cost you >$15k)
You are eligible if your income is below $125,000 for singles or $200,000 for couples.
20,000 spots have been allocated for the 2020-21 Financial Year.
Under the FHLDS (New Home Guarantee), first home buyers can build or purchase a new home, including:
For more information on any of these offers by state or territory please refer to http://www.firsthome.gov.au/
Or refer to each individual State website as listed.
Find the latest first home owner information on Victoria's State Revenue Office website.
Australian Capital Territory
Find the latest first home owner information on the Revenue ACT website.
New South Wales
Find the latest first home owner information on the Revenue NSW website.
Find the latest first home owner information on the Northern Territory Government website.
Find the latest first home owner information on the Queensland Government website.
For the latest first home owner information please refer to the Revenue SA website.
Find the latest first home owner information on Tasmania's State Revenue Office website.
Find the latest first home owner information on the Western Australian Government website.
5. Home Builders Grant and Home Builder Program – Federal Government Scheme
$25k Home Builder Grant – up until 31 December 2020.
The Australian Government’s Home Builder program provides eligible owner-occupiers, including first home buyers, with a grant of $25,000 to build a new home or substantially renovate an existing home.
For more details refer to:
HomeBuilder grants for eligible owner-occupiers | State Revenue Office (sro.vic.gov.au)
For the $25k Home Builder Grant you apply directly for the grant with the state or territory that you live in or plan to live in. For Victoria you apply through this link https://www.firsthome.gov.au/homebuilder/vic/
There is a two-step process.
- Apply after you’ve entered into an eligible HomeBuilder contract. The application must be submitted no later than 31 December 2020.
- Once construction begins, the supporting documents must be uploaded via their online portal.
Applicants for Home Builder Grant in Victoria will then have 6 months to commence construction from when the HomeBuilder contract is signed. In all other states you have three months to commence construction.
$15k Home Builder Program – up until 31 March 2021.
After 31 December, the extended Home Builder Program will replace the Home Builder Grant.
This will provide a $15,000 grant for building contracts (new builds and substantial renovations) signed between 1 January 2021 and 31 March 2021, inclusive.
There has also been an increase to the property price cap for new build contracts in NSW and Victoria. These are rising to $950,000 and $850,000, respectively.
However, this only applies to the second iteration – where the contract is signed between 1 January 2021 and 31 March 2021.
An extended deadline for all applications to be submitted, including those applying for the $25,000 grant and the new $15,000 grant. Applications can now be submitted up until 14 April 2021 (inclusive). This will apply to all eligible contracts signed on or after 4 June 2020.
More information in the recent changes and can be accessed at https://treasury.gov.au/coronavirus/homebuilder :
As always please feel free to give me a call if you would like to discuss a Home Loan for a new or existing property - with or without one of these grants. I'd love to hear from you!
Catherine Thompson, Principal - Volare Home Loans
Please note: This material is provided for general information and educative purposes only. The content does not constitute legal advice or recommendations and should not be relied upon as such.
While every care has been taken in the preparation of this material, Volare Home Loans cannot accept responsibility for any errors, including those caused by negligence, in the material. Volare Home Loans makes no statements, representations or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided.
Catherine Thompson is a credit representative 508141 of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237).
Message from CAtherine
Occasionally I come across an interesting article to do with Home Loans. I thought I'd share some of these with you here.