Navigating the world of real estate as a first-time buyer in Australia can be both exciting and stressful. With property prices continually fluctuating and the complexities of the market, it might seem like an uphill battle. You might find yourself asking questions like, “Is there help available for first home buyers like me?” or “What grants are available for first home buyers in Australia?” Well, we’ve got good news for you! Australia offers a range of grants and incentives designed to make the dream of homeownership a reality for first-timers like you.
Knowing the financial support available to you can make all the difference in your journey as a first home buyer. So in this comprehensive guide, we’ll dive into the various grants available, helping you understand how each can ease your path to buying your first home.
What Is the First Home Owner Grant?
The First Home Owner Grant (FHOG) is a one-time financial assistance that helps first-time buyers purchase or construct a new residential property for use as their primary residence. It’s a nationwide initiative, but the specifics can vary from state to state.
Below are the FHOG grant amounts per state:
Queensland: $30,000
Victoria: $10,000
New South Wales: $10,000
Northern Territory: $10,000
Western Australia: $10,000
South Australia: $15,000
Tasmania: $30,000
Who Qualifies for the First Home Owner Grant?
The FHOG is subject to specific criteria, which can vary slightly depending on the states and territories. However, there are some general eligibility requirements across Australia:
- You must be at least 18 years old, though some exceptions or discretion may apply in certain jurisdictions.
- You need to be an Australian citizen or a permanent resident. Some states might allow applications from certain visa holders.
- You must be buying or building your first home in Australia. If you or your spouse/partner have owned a home before or received a first home owner grant in Australia, you are generally not eligible.
- The grant usually applies to new homes, which can include newly constructed homes, substantially renovated homes, and off-the-plan home purchases. Some states may have specific definitions of what constitutes a “new home.” If the property is intended as an investment property and not as your primary residence, you are generally not eligible.
- The total value of your transaction must not exceed the maximum purchase price limits that vary between $575,000 and $1 million, depending on your state or territory.
- You must occupy the home as your principal place of residence. This usually means that you must move into the home within a specified period (often 12 months) of the purchase or completion of the building and must reside there continuously for a minimum period (commonly six months).
How to Apply for the First Home Owner Grant?
To apply for the FHOG, first check the First Home Owner Grant website for specific guidelines according to the state or territory where you are planning to buy your first home, and ensure that both you and your intended property fulfil the said criteria. Submit your application via an approved agent, like your financial lender, or directly to your relevant state or territory revenue office.
Note that applying for the FHOG may also entail seeking preliminary approval for the first home owner rate of duty, which refers to concessions on stamp duty for first home buyers. Make sure to check the guidelines for this according to your specific state or territory.
What Is the First Home Guarantee?
The First Home Guarantee (FHBG), previously known as the First Home Loan Deposit Scheme (FHLDS), is intended to help eligible buyers purchase a home for as little as a 5% deposit without being required to pay for Lenders Mortgage Insurance (LMI). It is not to be confused with the First Home Owner Grant or FHOG.
Who Qualifies for the First Home Guarantee?
To be eligible for the FHBG, you must satisfy several conditions:
- You need to be 18 years or older.
- You should be either an Australian citizen or a permanent resident.
- You must be buying your first home, or you must not have owned property in Australia in the last decade.
- Your chosen property should be among the eligible types, like existing homes, apartments, or off-the-plan properties.
- Your annual income must be under $125,000 for single applicants or $200,000 for joint applicants, as verified by the Australian Taxation Office’s Notice of Assessment.
- You must plan to occupy the property you are buying.
How to Apply for the First Home Guarantee?
Apply for the FHBG through one of Housing Australia’s 33 authorised Participating Lenders or their mortgage broker, as Housing Australia does not directly handle applications or offer personal financial guidance.
If you are interested and eligible, make sure to act quickly, as this scheme has a limited availability of 35,000 spots from 1 July 2023 to 30 June 2024.
What Is the Regional First Home Buyer Guarantee?
The Regional First Home Buyer Guarantee (RFHBG) assists eligible buyers in regional areas to buy a home with a smaller deposit. Under this scheme, Housing Australia guarantees part of your home loan from a participating lender. This means you can purchase a home with as little as a 5% deposit without needing to pay LMI.
The guarantee covers up to a maximum of 15% of the property’s value, as assessed by the lender. It’s important to note that the RFHBG is not a cash payment or a deposit for the home loan.
Who Qualifies for the Regional First Home Buyer Guarantee?
To be eligible for the RFHBG, you must meet the following criteria:
- You need to be at least 18 years old.
- You must be an Australian citizen or a permanent resident.
- You must not have owned a home in Australia in the past 10 years.
- Your property type should be eligible, such as existing homes or residential buildings, house and land packages, and off-the-plan apartments.
- You should have an annual income not exceeding $125,000 if you’re an individual or $200,000 if you’re a couple, as verified by the Australian Taxation Office.
- You should intend to live in the home you are purchasing.
- You must have resided in the regional area for at least 12 months from the date of your home loan agreement.
How to Apply for the Regional First Home Buyer Guarantee?
To apply for the RFHBG, first, you can use Housing Australia’s Regional Checker tool to ensure the area in which you wish to purchase a home qualifies as a regional area under the scheme.
Next, contact a Housing Australia-authorised Participating Lender or their authorised mortgage broker and submit your application through them. As mentioned earlier, direct applications to Housing Australia are not accepted.
Please be advised that it would be better to apply early, as there are only 10,000 places available under the RFHBG for the financial year 2023 to 2024.
What Is the Family Home Guarantee?
The Family Home Guarantee (FHG) helps eligible single parent or single legal guardians of at least one dependent purchase a home. The FHG is available for both first-time home buyers and previous home owners.
With this grant, you can buy a home with a deposit as low as 2% and avoid paying LMI. A portion of your home loan will be guaranteed by Housing Australia, up to a maximum of 18% of the property’s value.
Who Qualifies for the Family Home Guarantee?
Here are the requirements to qualify for the FHG:
- You should be a single parent or a single legal guardian with a minimum of one dependent to qualify. To be considered single, you must not be in a marital or de facto partnership. If you’re separated but not divorced, you’re not considered single. Dependents include your natural, adoptive, or legally guarded children who are eligible under the Social Security Act 1991, or persons with disabilities living with you.
- You need to be at least 18 years old.
- You should be an Australian citizen or a permanent resident.
- You must not currently own or intend to buy a second property upon settlement.
- Your property should be eligible, such as existing houses, townhouses, apartments, house and land packages, and off-the-plan apartments or townhouses.
- Your annual income should not exceed $125,000.
- You must intend to be the owner-occupier of the purchased property.
How to Apply for the Family Home Guarantee?
If you are a qualified single parent or single legal guardian, you can choose from Australia’s 33 authorised Participating Lenders or their authorised mortgage broker to lodge your application.
There are only 5,000 places available in the FHG scheme from 1 July 2023 to 30 June 2024, so make sure to apply ahead of time.
State-Specific Grants
Aside from those discussed above, there are first home buyer grants available in certain states in Australia. Below are some of them.
New South Wales
First Home Buyers Assistance Scheme
With the First Home Buyers Assistance Scheme (FHBAS), as a first home buyer in New South Wales, you’re eligible for a full exemption from transfer duty if you’re purchasing an existing or new home valued at up to $800,000. For homes between $800,000 and $1,000,000, a concessional rate applies. Similarly, if you’re buying vacant land to build a home, you’ll receive an exemption for land worth up to $350,000 and a reduced duty for land valued between $350,000 and $450,000.
Shared Equity Home Buyer Helper
In NSW, the Shared Equity Home Buyer Helper is designed to make home ownership more accessible for first home buyers such as key workers, single parents, older singles, and victim-survivors of domestic and family violence. As part of this program, with as little as a 2% deposit, you might be able to purchase your home. The NSW Government can contribute up to 40% for a new home or 30% for an existing home, thereby reducing the deposit you need and helping you secure a mortgage. You won’t need to make repayments or pay interest or rent on the government’s share, but you can choose to make voluntary payments. This arrangement also reduces your mortgage repayments and removes the need for expensive LMI.
Victoria
Victorian Homebuyer Fund
The Victorian Homebuyer Fund (VHF), a shared equity scheme by the Victorian Government, contributes up to 25% of the property’s purchase price in exchange for an equivalent equity share. This reduces your mortgage and eliminates the need for LMI. You must buy back the government’s share over time and the government shares in any capital gains or losses. If you’re a Torres Strait Islander or an Aboriginal applicant, you can qualify for more assistance with a lower deposit requirement (3.5%) and a higher equity contribution (up to 35%).
Queensland
Regional Home Building Boost Grant
In Queensland, the Regional Home Building Boost Grant offers a $5,000 incentive to eligible applicants who purchase or construct a new house, unit, or townhouse in regional areas, valued at less than $750,000.
Conclusion
Please keep in mind that what we discussed above are general guidelines on various grants available for first home buyers in Australia – the exact criteria can differ by state and territory. Therefore, we highly recommend checking with the relevant authority in your area or visiting their website for the most accurate and current information.
If you need help securing a first home buyer grant in Sydney, you can reach out to us at Unconditional Finance. We will be more than happy to assist you.
FAQ
1. How much deposit is required to secure a grant for first home buyers in Australia?
In Australia, the amount of deposit required to secure a grant for first home buyers, such as the First Home Owner Grant (FHOG), is not directly dictated by the grant itself. Instead, the deposit requirement is typically determined by the lender’s criteria for the home loan. Most lenders require a minimum deposit, usually between 5% to 20% of the property’s buying price.
2. Is it possible to apply for multiple grants as a first home buyer in Australia?
Yes, you may be able to apply for and receive multiple grants, depending on the specific programs available in your state or territory, and your eligibility for each program. For example, in addition to the FHOG, you may also qualify for the RFHBG if your state or territory allows it.