Finance | 4 June 2020

Demystifying the Government Assistance for First Home Buyers in Victoria

by Carlisle Homes

Purchasing your first property is a life milestone that so many of us look forward to reaching, but being a First Home Buyer can be stressful. With so many different grants, exemptions, schemes and concessions available, it can be hard to understand exactly what’s available, and what you’re eligible for.

But it doesn’t have to be confusing! In this blog, we’ll explain the four key government assistance programs that are available, and empower you to make your move! 

  1. First Home Owner Grant
  2. First home-buyer duty exemption or concession
  3. First Home Super Saver Scheme
  4. First Home Loan Deposit Scheme

First Home Owner Grant
In addition to the above $25K, if you are a First Home Buyer, buying or building a new home in Victoria valued up to $750,000, you may be eligible for a First Home Owner Grant (FHOG). A $10,000 FHOG is available when you buy or build your first home in metropolitan Melbourne. The FHOG increases to $20,000 for homes in regional Victoria, which includes areas such as Geelong. These grants are applicable if you are building a new home, or if you are purchasing a home that is less than 5 years old and has not been sold as a residential premises before.

Click here to take the eligibility test and see if you could receive a grant of up to $20,000!

First home-buyer duty exemption or concession 
In addition to the FHOG you may also be eligible for savings on stamp duty, such as a duty exemption or concession.

Help! What’s the difference?

If you’re eligible for an exemption, that means you will not have to pay stamp duty at all! This applies when you purchase a new or established property with a contract price of up to $600,000. If the property is valued at over $600,000 and up to $750,000, then you are eligible for a concession, which essentially means a discount on your stamp duty. 

Click here to find out more about the first home-buyer duty exemption or concession 

First Home Super Saver Scheme
If you’re saving for your first home, make sure you’re across the First Home Super Saver Scheme (FHSS). This scheme, which was released by the Australian government in 2017/18, aims to reduce the pressure on housing affordability by allowing you to save money for your first home within your superannuation fund. By doing this you can save faster for a deposit and get into your dream home sooner.

Since 1 July 2017, eligible first home buyers can make voluntary before-tax and voluntary after-tax contributions into their super fund to save for their first home. Since 1 July 2018, first home buyers using this scheme can apply to release the voluntary contributions, along with associated earnings, to help purchase their first home.

Please note you must meet the eligibility requirements to apply for the release of these amounts.

Click here to find out if you meet the FHSS eligibility requirements.

First Home Loan Deposit Scheme
If the dreaded 20% deposit feels completely out of your reach, the First Home Loan Deposit Scheme (FHLDS) will be of interest to you.

Typically, when borrowing more than 80% of a property’s value (AKA you don’t have a  20% deposit saved), Lenders Mortgage Insurance (LMI) is required. Depending on how much you’re borrowing this can be a significant cost, ranging from several thousand dollars, up to 10 or even 20 thousand dollars. The introduction of this scheme ultimately removes the need for LMI, with the Federal Government guaranteeing the difference between the deposit you have saved and the deposit the lender requires. This allows you to enter the property market and buy your first home without having to save for a complete 20% deposit.

To be eligible, you must not earn over $125,000 per annum as a single or $200,000 as a couple, you must have at least 5% deposit saved, and the property you are purchasing must not be over $600,000.

Click here to find out more about this scheme.

A final tip from the experts at Loan Studio: If you’re in the market for a first home it pays to do your homework. Speak to one of our partners at Loan studio for non-obligatory financial advice. Finding out if you’re eligible for the various grants and assistance available might put you one step closer to your dream of owning a home. Learn more here.

It’s also worth noting that in addition to the assistance from the government, banks have products and incentives tailored to first home buyers. These incentives vary, but may include a refund on conveyancing costs or specially discounted rates offered only to first home buyers. 

Think you’re ready to take the next step? Visit our First Home Buyers Guide to find out which are the most popular home designs for first home buyers and how Carlisle can get you into one sooner than you think! Contact us today!

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