How to reduce the costs for first home owners
There are a few options that first homeowners can take advantage of to bring down the out-of-pocket costs they have to settle upon buying a property, such as:
First Home Buyers Assistance Scheme
First Home Guarantee Scheme
First Home Owner Grant
First Home Owner Super Saver
1. First Home Buyers Assistance Scheme
Under the First Home Buyers Assistance Scheme (FHBAS), eligible first-home buyers purchasing an existing property for $800,000 or less won’t pay any transfer duty at all.
Those who buy a property worth between $800,000 and $1 million will pay a reduced rate. The amount payable depends on the value of the property.
If you buy vacant land to build a house on, there will be no transfer duty if it costs $350,000 or less. For vacant land valued between $350,000 and $450,000 a reduced transfer duty rate applies.
Eligibility:
18 years or over
an Australian citizen or a permanent resident of Australia
purchasing your first home
planning to live in the home for 12 months.
2. First Home Guarantee Scheme
The First Home Guarantee is an initiative from the Australian Government designed to support eligible home buyers purchase a home sooner with 35,000 First Home Guarantee places available for the current financial year through a panel of participating lenders.
What is the First Home Guarantee Scheme?
Under the First Home Guarantee, you're required to contribute a deposit of as little as five per cent of the property’s value without paying Loan Mortgage Insurance (LMI). The government then provides a guarantee to the lender covering up to 15% of the property’s value.
3 Types of Schemes and Eligibility
- First Home Guarantee (FHBG) – supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%. For FY2024-25, 35,000 places are available.
Australian citizens, aged 18+
must not have owned property in Australia before
Meet income and property price threshold requirements
5% deposit
- Regional First Home Buyer Guarantee (RFHBG) - supporting eligibl
Australian citizens, aged 18+
have lived in a regional area for the preceding 12 months
meet income requirements
5% deposit
purchase property in your current or adjacent regional area
- Family Home Guarantee (FHG) – supporting eligible single parents and eligible single legal guardians of at least one dependent to buy a home sooner, with a deposit as little as 2%. For FY2024-25, 5,000 places are available.
Australian citizens, aged 18+
not currently own a home, but may have owned property in Australia before
single parent with at least one dependent living with you
meet income (up to $125,000 per year) and property price threshold requirements
2% deposit
3. First Home Owner Grant
The First Home Owner Grant (FHOG) is a national scheme funded by the states and territories and administered under their legislation for new home.
*Application process and eligibility criteria vary by state or territory.
What you need to know about the First Home Owner Grant
Under the scheme, a one-off grant is payable to first homeowners who satisfy all the eligibility criteria. The main criteria is that it is a new home.
How much is the First Home Owner Grant?
The FHOG has changed over the years and varies a great deal from state to territory to state. It varies between $10,000 and $30,000 depending on state and territory.
Contact us to find out what you are entitled to.
4. First Home Owner Super Saver
The first Home Super Saver (FHSS) scheme allows you to make personal voluntary contributions to your super fund to help you save for your first home.
Concessional contributions are taxed at only 15%, which is usually less than your marginal income tax rate. Assessable FHSS amounts also benefit from a 30% FHSS tax offset.
You can withdraw up to $15,000 of your voluntary contributions from any one financial year, up to a total of $50,000 across multiple years, plus associated earnings.
You don't need to be an Australian citizen or an Australian resident for tax purposes to use the FHSS scheme.
IMPORTANT: Do not sign any property contract before you request a FHSS determination.
When you're ready to use the funds to help buy a home in Australia, you can submit a request to release your FHSS amount plus associated earnings.
FHSS Eligibility
The FHSS scheme can be used to purchase or build residential property in Australia for you to live in as your first home.
Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.
To use this scheme, you must satisfy all the following conditions:
18 years+ when requesting an FHSS determination
First home buyer, having never owned property in Australia - this includes investment property, vacant land, commercial property, lease of land or company title interest in land
Your name must be on the title of the property you buy
Not previously made a FHSS release request
Contributions you make for FHSS purposes are not accounted for separately in your super account(s), and you're not required to withdraw them to purchase a home if your circumstances change. If you don’t release contributions under the FHSS scheme, they remain part of your super interest, until you meet another condition of release for example, retirement.
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Whilst it can be challenging for first-home buyers trying to enter the market, there is support available and in most cases there are also stamp duty waivers on homes, land and also concessional stamp duty rates for property in certain price ranges.
The fastest way to find out what you are eligible for is to speak to one of our finance brokers.
Contact us or book a no-obligation chat here