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First Home Buyers Benefits

March 2, 2021
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First Home Buyers Benefits

First Home Buyers Benefits

The Australian Government work alongside the State Governments to develop and introduce various schemes to aid Australians to enter the property market with first home buyers benefits. These benefits aim to reduce the barriers to entry into the property market by often contributing towards the required deposit or reducing purchasing costs to make saving the required deposit a little easier.

First Home Owners Grant (FHOG)

The First Home Owners Grant (FHOG) was created in 2000 to grow the housing property market by enticing Australians to build new houses, rather than buy existing properties, with a large lump sum payment.

This scheme makes building a new home more attractive to first home owners and helps the Australian economy stay strong by investing in building new homes.

The FHOG scheme is available throughout Australia, varying in criteria and eligibility for each state and territory. Each has legislation and rules regarding the FHOG scheme so if you’re not buying in Victoria, you may have different criteria to follow.

The current Victorian scheme grants a $10,000 payment to all new homebuyers if they are either building or buying an apartment, unit or townhouse off-the-plan in Metropolitan areas of Melbourne. The Victorian Government provides greater incentives for people looking to buy or build in regional areas.

Purchasing in a regional area

The regional First Home Owner Grant currently provides a $20,000 payment for first time buyers who sign a contract to buy or build their new home in regional Victoria where the contract or construction price is up to $750,000.

To determine what is classified as a regional area, you’ll need to visit the State Revenue Office website here for a comprehensive list of councils that are included.

Stamp duty discounts

Stamp duty is a government levy owed when purchasing assets, such as property or vehicles. The amount of stamp duty that applies to a transaction varies depending on where you live, the type of transaction taking place and its value.

The State Government understands that purchasing a home can feel out of reach for many first home buyers, so they’ve made changes to stamp duty to assist young people and first home buyers to get into the market to potential first home buyer stamp duty concessions.

If you live in Victoria and you’re purchasing or building a property below $600,000, you will currently pay no stamp duty. That could potentially be a saving of up to $31,000.

If you’re purchasing a home between $600,001 and $750,000 there will be a discount on your stamp duty. The price you’re expected to pay will increase with the purchase price of the property. 

Check out Inovayts stamp duty calculator to determine what discounts you’re eligible for.

First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme (FHLDS) is an Australia-wide initiative introduced by the Government to support first home buyers to build or purchase a new home sooner.

Previously, first home buyers with less than a 20 per cent deposit needed to pay lenders mortgage insurance. With this new scheme, eligible first home buyers can purchase their new home with a deposit of as little as 5 per cent depending on their lender’s criteria. Up to 10,000 borrowers are currently able to access this scheme each financial year, however, the government has opened up 10,000 additional spots to eligible buyers for the 2020/2021 financial year.

HomeBuilder Scheme

Prime Minister Scott Morrison unveiled the HomeBuilder Grant last year in the peak of COVID-19. The Grant consisted of a $25,000 stimulus for eligible owner-occupiers, including first home buyers, with a grant to build a new home, substantially renovate an existing home or to buy an off the plan home.

Originally set to end in December 2020, the Government has now extended this. Eligible owner-occupiers must enter into a contract to build or renovate a home between January 1, 2021 – March 31, 2021 to receive a reduced grant of $15,000.

Provided you meet the eligibility criteria, this grant can be used with other existing state grants like the First Home Owners Grant we covered above.

How to Use These Benefits to Your Advantage

Depending on your circumstances, if you’re fortunate enough to receive the Homebuilder Grant, the First Home Owners Grant and access the First Home Loan Deposit scheme, you may be able to save up to $55k. That’s a huge saving!

When it comes to accessing grants and understanding the eligibility criteria, it’s important to reach out to your broker. Things regularly change within this space and there may be hurdles to jump through so it can help to have someone on your side helping you through every stage.

While we’re still technically in the midst of a global pandemic, the property market doesn’t seem to have slowed for first home buyers. According to data from the State Revenue Office, even during stage 4 lockdowns, first home owner payments increased by 13 per cent compared to the same time the year prior.

While some of us may have taken an unexpected hit with job losses, many people have also used the past year to reflect on what they would like to achieve with their living situation and in some cases, people have actually been able to save money by staying at home. With that in mind, the property market is still thriving for home buyers.

Who can I speak with to confirm my first home buyer benefits?

If you’re considering purchasing your first home in the next 12 months, get in touch with one of our friendly brokers. Where possible, it’s best to speak with a mortgage broker before finding your dream home as they can support you throughout the process and may even be able to get you into your new home sooner than expected.

Get in touch here.

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