What government incentives are in place for first home buyers?

Written By Alan Harrosh

As of 2024, the Australian government offers several incentives to help first home buyers enter the property market. These initiatives aim to reduce upfront costs and make homeownership more accessible. Below are some of the key government incentives available for first-time buyers:

1. First Home Owner Grant (FHOG)

The First Home Owner Grant is a one-time payment available to eligible first home buyers who are purchasing or building a new home. The grant amount and eligibility criteria vary by state and territory:

  • New South Wales: $10,000 for new homes valued up to $600,000, or up to $750,000 if you’re building.

  • Victoria: $10,000 for new homes in metropolitan areas, and $20,000 in regional Victoria for homes valued up to $750,000.

  • Queensland: $15,000 for new homes valued up to $750,000.

  • Western Australia: $10,000 for new homes, with different limits depending on location.

  • South Australia: $15,000 for new homes valued up to $575,000.

  • Tasmania: $30,000 for new homes (the highest grant currently available).

  • Northern Territory: $10,000 for new homes.

  • Australian Capital Territory: The FHOG was abolished in 2019, but first home buyers can access stamp duty concessions.

2. First Home Loan Deposit Scheme (FHLDS) / Home Guarantee Scheme

The First Home Loan Deposit Scheme (FHLDS), now part of the broader Home Guarantee Scheme, allows eligible first home buyers to purchase a property with a deposit as low as 5%, without needing to pay Lenders Mortgage Insurance (LMI). The government acts as a guarantor for up to 15% of the loan, meaning the buyer avoids the costly LMI premium.

There are different types of guarantees under this scheme:

  • First Home Guarantee: Supports first home buyers with a deposit between 5% and 20%.

  • Regional First Home Buyer Guarantee: Assists first home buyers in regional areas with a similar guarantee.

  • Family Home Guarantee: Designed for single parents, allowing them to purchase a home with just a 2% deposit.

3. First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme (FHSSS) allows first home buyers to make voluntary contributions to their superannuation fund, which can later be withdrawn for a home deposit. The tax advantages of super can help boost your savings faster.

  • You can contribute up to $15,000 per financial year and a total of $50,000 overall.

  • Contributions are taxed at a lower rate (15%) compared to your marginal income tax rate, making it a tax-efficient way to save for a deposit.

4. Stamp Duty Concessions and Exemptions

Stamp duty (also called transfer duty) is a significant cost when buying a home, but many states and territories offer concessions or exemptions for first home buyers. These are the most common incentives:

  • New South Wales: Full stamp duty exemption for properties up to $800,000, with concessions available for properties up to $1 million.

  • Victoria: Full exemption for properties valued up to $600,000, with partial concessions up to $750,000.

  • Queensland: Concessions for first home buyers on properties valued under $550,000.

  • Western Australia: No stamp duty for homes valued under $430,000, with concessions for homes up to $530,000.

  • South Australia: No specific stamp duty concessions, but FHOG may help offset costs.

  • Tasmania: Concessions for first home buyers purchasing new homes or homes in specific areas.

  • Northern Territory: First Home Owner Discount provides a concession of up to $18,601.

  • Australian Capital Territory: Full stamp duty exemption for homes valued under $600,000 for eligible buyers.

5. Regional First Home Buyer Support

Some states offer additional support to encourage homeownership in regional areas. For example:

  • Regional First Home Buyer Guarantee: Part of the Home Guarantee Scheme, this program helps first-time buyers in regional areas access the property market with a deposit as low as 5%.

  • Victoria's Regional FHOG: As mentioned, Victoria offers a higher FHOG ($20,000) for homes purchased or built in regional areas compared to metropolitan regions.

6. Shared Equity Schemes

Some states, such as Victoria and Western Australia, offer shared equity schemes where the government co-owns a portion of the property, allowing first home buyers to purchase with a smaller deposit and loan amount. The buyer can later buy out the government’s share over time.

  • Victoria’s Shared Equity Scheme: Buyers can purchase a home with just a 5% deposit, with the government contributing up to 25% of the property’s purchase price.

  • Western Australia’s Keystart Loans: This scheme allows eligible buyers to enter the market with a low deposit and without paying LMI, backed by the state government.

Conclusion

Government incentives for first home buyers in Australia can significantly reduce the financial burden of purchasing your first home. Whether it’s a cash grant like the First Home Owner Grant, reduced deposit requirements under the Home Guarantee Scheme, or stamp duty concessions, these initiatives can help make homeownership more achievable. Be sure to explore all available options and seek advice on eligibility, as these programs can vary by state and personal circumstances. At Rosh Partners, we’re here to help you navigate these schemes and find the right home loan for your needs.

Alan Harrosh www.roshpartners.com.au
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