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First Home Buyers – What are you waiting for?

Amongst all Covid-19 pandemic news and the government wanting to support the construction industry, there has been a strong push towards first home buyers as the boost the economy needs.

First-home buyers in every state of Australia already had cash incentives to build or buy a new home but last week the stakes got considerably higher.

When the federal government revealed its $25,000 HomeBuilder grant in a bid to boost the economy, throwing a lifeline to the home construction industry, it wasn’t designed to be used in isolation.

“For some first-home buyers, this will be their only opportunity to get into the market. Saving this kind of money takes most people years,” he said.

So before we talk about the grants available for fist home buyers, or should we say first home builders, let’s firstly revisit the first home loan deposit scheme.

What is the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme began on 1 January 2020. It allows first time home buyers to purchase a property with as little as a five per cent deposit and without the need to take out lenders mortgage insurance (LMI). The government says this could save first home buyers as much as $10,000.

The Commonwealth Government guarantees the difference between what the first home buyer has saved and the 20% deposit threshold lenders usually require before they’ll provide a loan without LMI.

For instance, if you have $45,000 to put towards a $500,000 home, the government would step in and guarantee the first $55,000 of your loan so that it brings your security up to $100,000, or 20% of the total value of the property, excluding government fees like stamp duty. In this sense, the First Home Loan Deposit Scheme has a similar effect to a Family Guarantee but with the government playing the role of guarantor over the loan instead of a family member.

While the scheme doesn’t offer a cash payment, the good news is that you can use it in conjunction with any other government grants, schemes, concessions and waivers you qualify for. For instance, any First Home Owner Grant or stamp duty concessions you qualify for in your State or Territory will still apply.

Am I eligible for the First Home Loan Deposit Scheme?

Home Loan

To be eligible for the scheme you must be an Australian citizen who’s over 18 years old. If you’re buying as a couple, it must be with your spouse or partner. You must also never have owned residential property previously in Australia, whether as an owner-occupier or investor.

There are other requirements you’ll need to meet, when it comes to your salary, your home loan and the property itself. We’ve set these out in more detail below.

1. Property requirements

Unlike a First Home Owner Grant, which usually requires you to buy a new home, there are few restrictions on the type of property you can purchase under the First Home Loan Deposit Scheme – both newly-built and established properties qualify.

However, there are thresholds on the value of the property. These vary depending on which State or Territory you’re located in and whether you’re in a metropolitan or regional area.

State or TerritoryCapital city and regional centresRest of state
Western Australia$400,000$300,000
South Australia$400,000$250,000
Australian Capital Territory$500,000
Northern Territory$375,000


For the purposes of the scheme, a regional centre includes any centre with a population greater than 250,000. This includes the Gold Coast, the Sunshine Coast, Newcastle and Lake Macquarie, the Illawarra and Geelong. Some other regions have different thresholds.

2. Buying as a single or couple

You can qualify for the scheme as an individual buyer or as a couple. To be eligible as a couple, you need to be married or in a de facto relationship. Unfortunately, you’re not eligible if you’re buying with people you have a different relationship with, such as a parent or grandparent, sibling or friend

3. Salary threshold

If you’re purchasing a home on your own, you need to have earned $125,000 or less in the last financial year (as declared in your ATO Notice of Assessment) to qualify for the First Home Loan Deposit Scheme. If you’re purchasing as a couple, you must have had a combined taxable income of less than $200,000 in the last financial year.

4. How much deposit do you need to have saved?

To be eligible, you’ll need to have saved at least a five per cent deposit. The government says these need to be ‘demonstrated savings’, which means you won’t be able to count any First Home Owner Grant money towards this amount.

5. Principal and interest loan

Your loan usually needs to be a principal and interest home loan for the entire period of the guarantee. The exception to this is if you’re taking out a loan over both vacant land and to construct a new home. In these circumstances, interest-only loans are eligible while your home is in construction.

Owner/occupiers only

Finally, the scheme is only open to owner-occupiers, so you’ll need to be purchasing the home to live in it.

And now, the first HomeBuilder grant for new home construction

Each state varies in terms of what state governments are adding as incentives to boost the construction industry and local economies.

In Victoria, a first time home buyer can access at least $35,000, and up to $45,000 if they’re building a new home in a regional area.

In Western Australia could receive $55,000 in government assistance if they build a new home, thanks to a bonus $20,000 that the state government is going to tip in on top of HomeBuilder.

Those in Queensland and South Australia can claim $40,000, Northern Territorians can get up to a whopping $55,000 and Tasmanians $45,000.

Unfortunately, first-home buyers in the ACT and NSW — and particularly those in Sydney with its $1.16 million median house price — will get the least amount of help.

First-home buyers in the ACT can get up to $32,500, while those in NSW can get up to $35,000.

“The grant will definitely provide some boost to the construction industry but there are a lot of restrictions and in some cases, they’ll mean it’s just too hard (to access),” said Domain economist Trent Wiltshire.

But for first-home buyers in those states with bigger grants available and moreover, lower property prices, the grants would make all the difference, Mr Ross said, noting that in some cases the funds would cover more than 10 per cent of their deposit.

“We’re doing house-and-land packages in that sweet spot between $350,000 to $400,000 and $40,000 in grants covers more than 10 per cent,” he said.

“This is the best opportunity I’ve seen since being in land development and will mean the difference between getting a house or not getting a house for a lot of young people.”

NSW – $35,000

On top of the new HomeBuilder grant of $25,000, NSW first-home buyers already have access to a $10,000 grant for new properties costing less than $600,000 and owner-builder/building contracts worth less than $700,000.

If you’re buying land to build a new home, the total price – including the land and home – must be no more than $750,000. 

There is also no stamp duty payable on property under $650,000, or vacant land under $350,000, while properties between $650,000 to $800,000, or vacant land between $350,000 to $450,000 get discounted stamp duty.

That’s a saving of up to $24,740 on a $650,000 home.

Victoria – up to $45,000

Victorians already had a $10,000 grant available for new first homes, and $20,000 for new homes built in regional areas, valued at $750,000 or less. They also don’t pay stamp duty on property under $600,000, with discounted stamp duty applying on property between $600,000 to $750,000.

That’s a saving of up to $31,070 for a home worth $600,000.

First-home buyers building or buying a property in regional Victoria can claim $45,000, while those buying closer into Melbourne will receive $35,000.

Queensland – $40,000

Queensland first-home buyers already got $15,000 towards buying or building a new house, unit or townhouse valued at less than $750,000. With the federal government’s HomeBuilder scheme, that will take the total available to claim to $40,000.

Queenslanders also don’t pay transfer (stamp) duty on homes costing less than $500,000, and a discounted rate up to $550,000. That translates to a saving of $15,925 on a home under $550,000.

Western Australia – $55,000

First-home buyers in Western Australia already had access to $10,000 to put towards the cost of building or buying a new home, but the past week has seen their incentives go next level.

On Sunday the state government announced it would spot home buyers a bonus $20,000 for new residential builds on top of the $25,000 already offered by the HomeBuilder scheme.

For first-home buyers, that takes the total cash pool to $55,000 – and that’s before the stamp duty concessions. 

Based on a purchase of $430,000, a first-home buyer would save $14,440 in stamp duty.

ACT – $32,500

ACT first-home buyers had $7500 available to them before the federal government announced their $25,000 incentive.

There is also no stamp duty to pay on new-built properties under $470,000, or vacant land under $281,200.

A discounted rate on new-built properties is given between $470,001 to $607,000, or vacant land between $281,201 to $329,500.

Tasmania – $45,000

Tasmanian first-home buyers were already eligible for a $20,000 grant from their state government. This applied to any new property, of any value.

Tasmania provides a 50 per cent stamp duty discount on properties below 400,000, which equates to a saving of nearly $7000.

South Australia – $40,000

A grant of $15,000 is already available for new properties valued at less than $575,000, so the HomeBuilder grant will take the total for South Australian first-home buyers to $40,000.

All first-home buyers pay some stamp duty in South Australia, although there is an off-the-plan stamp duty concession available of up to $21,330 on properties under $500,000.

Northern Territory – up to $55,000

A number of grants are available in the NT, as outlined on the Home Owners Assistance web page, but they include a $10,000 grant for first-home buyers, as well as a BuildBonus grant of $20,000.

Any home owner is eligible for BuildBonus but it is limited to the first 600 applications.

First home buyer New

There is also a discount on stamp duty that could get first-home buyers up to $18,601 off the cost of stamp duty, as well as a scheme that gives them up to $2000 towards the cost of household goods.

Not including the stamp duty exemptions or the household goods grant, first-home buyers in the NT could get up to $55,000 in cash incentives once the new HomeBuilder grant is factored in.

There is a lot of information to take in here but please, if you have questions or would like assistance with any of this, we’d love to be able to assist you.

Lachlan Mirams

Lachlan Mirams

Finance Strategist at Intuitive Finance
Lachlan joined Intuitive Finance in September 2013, initially in an administrative role before moving to Client Services in October 2014. Lachlan moved into a new Relationship Manager role in January 2017 where he oversees our Client Services Managers along with dealing in some strategic analysis himself. He has recently completed his Diploma of Finance and Mortgage Broking Management and will commence broking in January 2018. Outside work, Lachlan is a very talented footballer, currently playing in the Victorian Amateur Football Association with St Bedes/Mentone. He is a very avid sports fan with his most passionate teams being the North Melbourne Kangaroos in the AFL and the Cleveland Cavaliers in the NBA. In his spare time, he enjoys catching up with his mates, playing football & basketball and watching any sport that is on TV
Lachlan Mirams

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