With increasing house prices, entering the property market has become more of a challenge, therefore following are some of the incentives available to help first home buyers make their first property purchase.
Home Guarantee Scheme
If you’re eligible for the Home Guarantee Scheme, you could buy a home with a deposit as low as 5% (or 2% for single parents) without having to pay Lenders Mortgage Insurance.
There are three different types of Guarantees available under the Home Guarantee Scheme.
Eligibility criteria:
To apply for the Home Guarantee Scheme, home buyers must be:
- Applying as an individual or two joint applicants
- An Australian citizen(s) or permanent resident(s)* at the time they enter the loan
- At least 18 years of age
- Earning up to $125,000 for individuals or $200,000 combined for joint applicants, as shown on the notice of assessment (issued by the Australian Taxation Office)
- Intending to be owner-occupiers of the purchased property
- First home buyers or previous homeowners who haven’t owned or had an interest in a real property in Australia (this includes owning land only) in the past ten years.
You MUST live in the property for as long as the Guarantee is in place.
Stamp duty relief
Stamp duty relief means eligible first home buyers may not be required to pay the stamp duty that would usually apply to the purchase of a new home or vacant land that you intend to build your principal place of residence on.
Stamp duty relief for eligible first home buyers applies to a new home, off-the-plan apartment or vacant land to build your new home on.
Eligibility criteria:
Stamp duty relief may be available where each applicant is both:
- At least 18 years of age at the time of making an application and a natural person.
In addition, at least one of the applicants must be either:
- An Australian citizen or a permanent resident of Australia
- A New Zealand citizen permanently residing in Australia who holds a special category visa.
First Homeowner Grant (FHOG)
South Australian First Homeowners may be eligible for a one-off payment of up to $15,000 under the FHOG.
The first homeowner grant applies to the purchase or construction of a new home, an off-the-plan apartment, a substantially renovated home, a comprehensive building contract or a contract to build a home, or owner builders.
Eligibility criteria:
The first homeowner grant may be available where each applicant is both:
- At least 18 years of age at the time of making an application
- A natural person.
- In addition, at least one of the applicants must be either:
- An Australian citizen or a permanent resident of Australia
- A New Zealand citizen permanently residing in Australia who holds a special category visa.
If you signed your contract on or after 13 February 2025, you will not be eligible for the first homeowner grant if you or your spouse or domestic partner own or have previously owned (hold or held a relevant interest) an Australian residential property, including vacant land.
First Home Super Saver Scheme (FHSS)
The first home super saver (FHSS) scheme allows you to make personal voluntary contributions into your super fund to help you save for your first home. Using the FHSS scheme, you can contribute up to a maximum of $15,000 in any one financial year, up to a maximum of $50,000 across all years.
Learn more about the FHSS Scheme in our previous article: Have you heard of the First Home Super Saver Scheme?
Eligibility criteria:
Before you start making contributions under the FHSS scheme you should:
- Read and understand all the requirements of the FHSS scheme to ensure it is right for you, including considering whether you need independent financial advice
- Check that your nominated super fund(s) will release FHSS amounts
- Check that your contributions are eligible for use under the FHSS scheme
- Ask your fund about any fees, charges and insurance implications that may apply
- Check that your super fund has your current contact details – ensuring your name and address in the super fund’s records exactly match the details we have for you in our records.
Using a guarantor
A guarantor on a mortgage is a person who provides the additional security for your home loan if you don’t have a sufficient deposit. With a guarantor loan, your guarantor can use the equity in their own home or investment property to provide additional security for your loan.
It is important to note that if you can’t meet the loan obligations, the guarantor will be liable for the amount specified in the guarantee. Anyone who is considering becoming a guarantor is advised to seek independent legal and financial advice before accepting the role of guarantor.
As always, for further assistance with financial planning or to discuss your options, you can contact your dmca adviser.
Information in this article was adapted from a presentation by Martin Roach – Mortgage Broker and Franchise Owner at Mortgage Choice. Please find his presentation slides here, or contact Martin for more information: e [email protected] | m 0408 584 181