Guide to First Home Buyer Grants and Schemes
As a first home buyer, preparing to purchase your first home can become a perplexing (and quite frankly, daunting) task if you don’t know where to begin.
Fortunately, Australians are afforded many opportunities to reduce costs and speed up the home buying process through various government incentives and grants.
Understanding these grants and knowing whether you can qualify for them can potentially save you days of work and thousands of dollars on your mortgage. However, the frequent updates and amendments to these incentives can often leave first home buyers scratching their heads over what they can and can’t leverage.
Which first home buyer grants are currently available?
There are a myriad of grants, incentives and exemptions available to first home owners in Australia. The main 4 categories that these financial aid incentives fall under are as follows:
- First Home Owners Grant (FHOG)
- Stamp Duty Exemptions
- Home Guarantee Scheme and Others
Some of these, such as the first home owners grant and stamp duty exemptions are controlled and regulated by individual states and territories. On the other hand, schemes made available as part of the wider Home.
Guarantee Scheme operate on a federal level and are managed by third party government agencies like the National Housing Finance and Investment Corporation (NHFIC).
Most state level grants and exemptions are handed out based solely on eligibility criteria and are available to anybody who meets the relevant criteria. Whereas, federal schemes usually have a limit on the number of applicants accepted and qualifying requirements tend to be more situation-specific.
Rest assured, however, that almost all first home buyers in Australia are usually eligible for some sort of financial assistance and even if you do not qualify for one of these grants, it doesn’t necessarily mean that you will be ineligible for all of them. In fact, some first home buyers may be eligible to benefit from multiple grants as long as they meet the appropriate requirements. Moreover, there are some grants or incentives in this article that are also available to non-first home buyers as well.
Stamp Duty Exemptions
Stamp duty is a one-time dutiable tax that applies when you purchase a high-value asset, i.e. a property (or transfer a property title into your name). Also referred to as transfer duty or land transfer duty, the total amount is usually payable after settlement and the amount payable will vary depending on your location and circumstances.
Typically, the stamp duty payable depends on the property value. Stamp duty exemptions are usually available to first home buyers who are purchasing a property under the relevant property price cap. However, you may still be eligible for stamp duty concessions even if you are not a first-time buyer or purchasing a high-value property. Each state and territory has its own stamp duty concessions and eligibility requirements. Most states follow these general guidelines when it comes to stamp duty exemptions.- An Australian citizen or permanent resident.
- Be at least 18 years old (There may be some exceptions to this rule, i.e. QLD).
- Move into the property within 12 months, and occupy the property as a principal place of residence for at least 6-12 months.
- Total household income must be under the state-specific threshold.
- Must not dispose (sell, transfer, lease or otherwise grant exclusive possession) of all or part of the property before you move in.
First Homeowner Grant (FHOG)
First Home Owners Grant is a state-specific, one-off payment designed to provide home buyers with a much needed financial boost when purchasing their first property. Although the grant itself is standardised across the country, the amount provided by the FHOG and the qualifying conditions do vary across states and territories.
At the fundamental level, the FHOG’s basic qualifying criteria remains the same for all Australians:- An Australian citizen or permanent resident.
- At least 18 years of age.
- Move into the property within 12 months and must occupy the property as your principal place of residence for at least 6-12 continuous months.