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What does the government offer for first home buyers?

Jodie Humphries avatar
Jodie Humphries
- 8 min read
What does the government offer for first home buyers?

Buying your first home isn’t particularly easy, so it can help to have financial support to get you over the line. Fortunately, the Australian government has a number of schemes designed to help Australians purchase their first home sooner, from grants to guarantees. 

We’ve compiled a list of the first home buyer initiatives that are up for grabs, so you know your options and understand how they all work.

First Home Owner Grant

To kick off our list is the First Home Owner Grant (FHOG). This is a national scheme that was introduced in July 2000 to offset the effect of the GST on home ownership. Fast forward to 2022, this scheme now works as an economic stimulus tool, providing a one-off lump sum payment to eligible first home buyers that satisfy all the eligibility criteria. This eligibility criteria will depend on where you live, as each state and territory funds and administers the scheme under their own legislation.

How much is the First Home Owner Grant?

How much you can receive through the FHOG depends on where you live.

New South Wales, Victoria, Western Australia and the Northern Territory all offer FHOGs worth $10,000. Queensland and South Australia sit a bit higher, at $15,000; and Tasmania is at a generous $30,000. The FHOG in the Australian Capital Territory was scrapped from 1 July 2019, and replaced with stamp duty savings worth up to $35,910 as of FY 21/22 (more on this later).

Am I eligible for the First Home Owner Grant?

In states and territories where the FHOG is up for grabs, it’s generally only available if you buy or build a brand new home or purchase a substantially renovated home.

You’ll typically need to meet the following criteria to be eligible for the FHOG:

  • You must be an Australian citizen or permanent resident aged over 18.
  • You must be a person buying or building a home, not a company or trust.
  • You or your spouse, partner or co-purchaser must not have previously owned a home you have lived in.
  • You or your spouse, partner or co-purchaser must not have previously received the FHOG.
  • You must live in the home for at least six months after you’ve purchased or built it.

Finer points of eligibility may apply in each state and territory, such as the price of the property, so make sure to read up on the relevant criteria to see if you fit the bill, before making an application.

First Home Guarantee

Another Australian government incentive for first home buyers is the First Home Guarantee (formerly called the First Home Loan Deposit Scheme).

The First Home Guarantee allows eligible first home buyers to secure a mortgage with as little as a 5 per cent deposit, and avoid the cost of Lenders Mortgage Insurance (LMI). LMI usually applies to borrowers with a deposit that’s less than 20 per cent of the property’s value.

How does the First Home Guarantee work?

The government guarantees the difference between what you’ve saved and the 20 per cent deposit threshold lenders typically require before they provide an LMI-free loan. For example, if you have $55,000 to put towards a $600,000 property, the government would step in and guarantee the first $65,000 of your mortgage so it bumps your security up to $120,000, or 20 per cent of the total value of the property, excluding government fees such as stamp duty.

While the First Home Guarantee doesn’t offer a cash payment, you can use it in conjunction with any other government offers that you qualify for, such as the FHOG or stamp duty concessions.

Am I eligible for the First Home Guarantee?

While eligibility for the First Home Guarantee may differ from state to state, you generally need to meet the following criteria:

  • You must be an Australian citizen over 18 years of age.
  • You must have never owned residential property previously in Australia, whether as an owner-occupier or investor.
  • Individual applicants must have earned less than $125,000 or $200,000 for couples in the previous financial year.
  • Couples must be married or in a de facto relationship. Other persons buying together, including friends, siblings or a parent/child aren’t eligible.
  • Your property must be an acceptable type and within the property price threshold for the suburb and postcode. You can check the property price cap for your area on NHFIC’s website.

Family Home Guarantee

The Family Home Guarantee allows eligible single parents to buy homes with as little as 2 per cent deposit and avoid LMI costs, while borrowing the remaining 98 per cent.

Am I eligible for the First Home Guarantee?

To be eligible for the First Home Guarantee you must meet the following criteria:

  • You must be a single parent with at least one dependent living with you.
  • The single parent must be the only name listed on the loan and the certificate of title.
  • You must be an Australian citizen, aged 18 or over.
  • You must not currently own a property in Australia, but may have previously.
  • You must meet income ($125,000 or less per financial year) and property price threshold requirements.

Keep in mind that other eligibility requirements may apply depending on the state or territory you live in, so make sure to read up on the information relevant to you.

First Home Super Saver Scheme

Another Australian Government initiative designed to help you buy your first home sooner is the First Home Super Saver Scheme (FHSS).

Essentially, the FHSS allows you to make extra contributions to your super fund and then withdraw them, pay less tax, and use the money to form part of your home deposit.

All contributions to super will count towards the ordinary contribution caps that apply. The maximum amounts you’re able to contribute (within the ordinary caps) and withdraw as part of the FHSS are $15,000 per financial year, and $30,000 in total across all years. This total will increase from $30,000 to $50,000 from 1 July 2022.

Am I eligible for the First Home Super Saver Scheme?

To access the FHSS you must:

  • not have previously owned a property in Australia
  • be an Australian citizen over 18 years of age
  • not have previously had funds released from your superannuation under this scheme
  • occupy the premises you buy, or intend to as soon as practicable.
  • occupy the property for at least six months within the first 12 months you own it, after it is practical to move in.

Stamp duty concessions

When you buy or acquire a property in Australia, you’re required to pay stamp duty as an upfront cost. Each state and territory has its own stamp duty concessions and exemptions, which may reduce or eliminate how much you have to pay. 

Am I eligible for the First Home Super Saver Scheme?

Not everyone is eligible for a stamp duty concession or exemption, so you’ll need to check the eligibility criteria of your state or territory to see if you are.

As long as you're eligible, here are the stamp duty concessions and exemptions you can expect in each state and territory.

  • New South Wales: If you’re buying a new or existing home worth less than $650,00, you’ll pay no stamp duty. If the new or existing home is valued between $650,000 and $800,000, you’ll be able to get a discount.
  • Victoria: If the new or established home is valued under $600,00, a stamp duty exemption should apply. If the new or established home is valued between $600,000 and $750,000 you may be able to secure a concession that’s applied on a sliding scale.
  • Queensland: No stamp duty is payable on all homes valued under $500,000. Concessions should be available for homes with a value between $500,000 and $550,000.
  • Western Australia: Stamp duty exemptions apply to houses valued under $430,000. Sliding stamp duty concessions apply to homes valued between $430,000 and $530,000.
  • Australian Capital Territory: Home buyers can avoid paying stamp duty if all buyers are over 18 and they’re combined gross (before tax) income is below $160,000. If you have children, the threshold is lifted on a sliding scale, depending on the number of kids you have. The maximum income threshold is $176,650 for households with five or more children. Buyers must live in the home continuously for 12 months and all buyers must not have owned a property in the past two years.
  • Tasmania: First home buyers purchasing established homes can receive a 50 per cent discount on stamp duty if their property's value is $600,000 or less and is bought by 30 June 2023.
  • Northern Territory: There are currently no stamp duty savings for home buyers, as the discount of up to $18,601 for existing or new home buyers expired on 30 June 2021.
  • South Australia: Unlike the other states and territories, South Australia offers no stamp duty concessions or exemptions for first home buyers.

As a future homeowner, it’s important to research the home loan market and compare home loans, including the costs and features of different products, so you can secure one that matches your needs, budget, and lifestyle. 

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Product database updated 27 May, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.