Initiatives for first home buyers

For first home buyers, there are some seriously good government incentives that can help you make your home ownership dreams a reality.

These include:

• First Home Loan Deposit Scheme
• First Home Super Savers Scheme
• HomeBuilders’ Grant
• First Home Owners’ Grant
• Transfer Duty (Stamp Duty) Concessions and Exemptions

What is the First Home Loan Deposit Scheme?

The government’s scheme is designed to allow easier and faster access to the property market for first home buyers. The scheme will do this by allowing first time buyers to pay a deposit as little as 5%, while avoiding lenders mortgage insurance (LMI). Most banks and lenders require a minimum deposit of 20% of the property’s value for the borrower to be exempt from LMI. The scheme allows first home buyers who can’t reach this threshold to take out a loan if they have saved at least 5% of the value of the property they are buying. The government will underwrite the loan so that borrowers do not have to pay LMI.

What is the First Home Super Savers Scheme (FHSS)?

The Australian Government introduced the FHSS to assist first home buyers to save your deposit faster.

The scheme allows first home buyers to save through your superannuation fund. You can deposit pre-tax money to your super, which also has the potential to drop you to a lower tax bracket on the balance of your wages.

It is administered by the Australian Taxation Office who will be responsible for ensuring that users of the scheme are first home buyers and that the funds withdrawn will be used to buy a property.

HomeBuilders’ Grant

This is a federal initiative that was just announced on 4th June 2020 in a bid to stimulate the building industry post COVID-19. It gives home builders and renovators a grant of $25,000 towards the construction of a new home or renovation of an existing home.

This could help you buy a cheaper home that is in need of renovating.

What is the First Home Owners’ Grant? 

The Queensland First Home Owners’ Grant is a state government initiative to help first home owners to get their new first home sooner.

If your contract is dated 1 July 2018 or later, you can get the Queensland grant of $15,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000). The grant is paid per new home; not to each of the applicants for the same home. Source

Transfer Duty Concessions and Exemptions (Qld)

Concessions and exemptions are available to reduce the amount of transfer duty (sometimes called stamp duty) you need to pay when buying a home.

Transfer duty applies when you transfer land in Queensland—this typically happens when a person signs a contract to buy a home or when their name is added to the title of land.

You may be eligible for a concession when buying your home. For transfer duty, a concession is a lower rate of duty than what would apply if you were buying non-residential land or an investment property.

In some cases, you may not have to pay any duty because the benefit of the concession is equal to or greater than the duty you would otherwise pay. This will depend on the value of the property you are buying.

For example, you will not pay any transfer duty if you are eligible to claim a first home concession and the value of the home is less than $500,000. Source

Stamp Duty and Grants (in other states)

Stamp duty concessions and exemptions and first home owner incentives are managed by state governments. To find out what's available to you - wherever you are in the country - I'm happy to explain and point you in the right direction.

What does this mean for you?

There are conditions on each of these schemes and grants that I’d be happy to discuss with you in further detail. This will help you have a better understanding of how you can make it work for you and reduce your entry costs as much as you can.

There are ways and means to make first home buying a reality. The government is doing everything they can to stimulate the economy and build confidence in buying property.

If your goal is to be a home owner, let’s talk and see what you need to make it happen sooner rather than later.