For first home buyers, there are some seriously good government incentives that can help you make your home ownership dreams a reality.
- First Home Loan Deposit Scheme
- First Home Super Savers Scheme
- HomeBuilders’ Grant
- First Home Owners’ Grant (New Home)
- First Home Buyers’ Assistance Scheme
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Taxation Office who will be responsible for ensuring that users of the scheme are first home buyers and that the funds withdrawn will be used to buy a property.
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 in your preferred location that is in need of renovating. Note: minimum renovation budget and maximum home value apply.
First Home Owner’s Grant (New Home) and First Home Buyers’ Assistance Scheme
These two state government schemes offer $10,000 towards the purchase price of a new home in addition to full or partial exemption on transfer duty (sometimes called stamp duty).
To qualify as a first home buyer, you must be purchasing the first home you or your spouse have owned or co-owned in Australia, although there are some exceptions.
You must also move into the property within 12 months, and live there for at least six continuous months.
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 purchase costs.
There are ways and means to make first home buying a reality. The federal and state governments are 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.