When our First Home Owners start to plan for buying a home, there are a number of government grants and schemes that will become a part of their planning. The specifics of each one can quickly become stumbling blocks of complication to understand these, amongst what started as a simple desire – to buy their first home.
There is a range of schemes available for First Home Buyers both at the national and state level. They have differing intricacies that may seem attractive, but the ways to navigate them can often leave people confused and unsure if any of them apply to them. In addition, there are further restrictions depending on your citizenship status relating to some of these schemes. So, there is a lot to learn before you get started!
For this reason, we have put together a list of the most common grants & schemes available, in order to make homeownership more affordable for First Home Buyers. Here are the 5 different grants and schemes:
The First Home Loan Deposit Scheme (FHLDS)
This federal government scheme allows eligible first home buyers with a small deposit (less than 20%) to get a home loan without paying large mortgage insurance premiums. Lenders Mortgage Insurance (LMI) protects lenders, and it equates to a lot of dead money if you have to pay it.
The government guarantee on offer means you do not have to pay this at all. It is more like the government providing a guarantee to the lenders when you do not have 20% deposit. This is similar to a family guarantee however it is provided by the government. Now that’s good news right?!
There are different restrictions depending on the cost of the property you wish to buy and where it is located. Only 10,000 Scheme places will be available this financial year which are released on the 1st of July. Read more
Find out more here: https://www.nhfic.gov.au/what-we-do/first-home-loan-deposit-scheme/
The Family Home Guarantee Scheme
The nationwide government scheme is a new initiative to support eligible single parents with dependents to purchase a family home to enter or re-enter the housing market sooner.
With this latest scheme, single parents can buy a home with having at least a 2% deposit, without paying Lenders Mortgage Insurance.
There will be 10,000 total places under the total scheme – 2,500 in each of the next four years. There are still a few unknowns at this stage and many of the restrictions related to the FHLDS will likely exist for this scheme.
Find out more here: https://www.nhfic.gov.au/what-we-do/fhlds/
First Home Super Saver Scheme
The First Home Super Saver Scheme allows first home buyers to save a deposit for their first home inside their super.
This can help first home buyers save faster with the concessional tax treatment of superannuation savings. Less tax paid means you get to save for your deposit faster. It just takes a little knowledge and commitment to save your deposit for your first home.
Find out more here: https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/
First Home Owner’s Grant (FHOG)
Every state and territory has a First Home Owner’s Grant available to First Home Buyers who are constructing or purchasing a ‘new’ residence. The grant amount differs between each state & territory but is valued between $10,000 – $20,000 depending on your location.
There can be different eligibility requirements so it’s important to consult with your mortgage broker to check your eligibility.
Find out more here: https://www.firsthome.gov.au/
Stamp Duty Concessions
Most States and Territories also offer generous stamp duty discounts to first home buyers, regardless of whether they’re buying a new or established property. In some states there will be no Stamp Duty payable depending on the purchase price of your property. To find out whether you’re eligible, visit the Office of State Revenue website in your state, or speak to your solicitor, conveyancer or Mortgage Broker.
Calculate your stamp duty using our stamp duty calculator.
If you are not clear about your options, then it is even more important to start the research and conversations to see if you can take advantage of any of the schemes, to help you on your path to your first home.
You can also read a little more about these schemes from a previous blog we wrote which gives you a brief breakdown of each one. Read it here.
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