The incentives available to Australian first home buyers, state-by-state

The incentives available to Australian first home buyers, state-by-state

First home buyers are out in full force despite COVID-19, and that may well be thanks to the many financial incentives available to them. 

The desire for home ownership among Australians is still strong. About 45 per cent of Australian millennials said they will be focusing on buying a property as a financial goal for the next five years, up by three percentage points since February 2020, UBank’s latest Know Your Numbers survey showed.

While there is extensive financial support out there for first home buyers, wading through complicated government and banking resources can be a chore in itself. 

Accessing these incentives could potentially be the difference between getting tens of thousands of dollars no help at all, so knowing how the system could work to your favour is important.

Before considering any of these support measures, make sure you understand their eligibility criteria and other terms and conditions they may carry.


Government support for first home buyers

First Home Loan Deposit Scheme

One of the more talked-about government measures, the First Home Loan Deposit Scheme (FHLDS) allows eligible first home buyers across Australia to buy a property with a minimum deposit of 5 per cent without being charged lenders mortgage insurance (LMI).

Usually, a 20 per cent deposit is required if you want to sidestep LMI costs, which can, in some cases, cost up to tens of thousands of dollars. Under the FHLDS, the federal government guarantees the difference .

The scheme does have property price thresholds, so it’s important to check if the price bracket you’re aiming for falls below the cap.

The 2020 federal budget added an additional 10,000 places to the scheme and updated the price thresholds, which better reflect property values in capital cities.

You can access the FHLDS through 27 participating lenders across Australia.

Home Builder

The Commonwealth HomeBuilder Grant provides a one-off $25,000 to eligible first home buyers and other owner-occupiers wanting to build or substantially renovate a new home.

Some conditions include:

  • Individuals must earn an annual income of less than $125,000, and $200,000 for couples.
  • Property value must not exceed $750,000; or if you are substantially renovating your existing home, the value of your home must not exceed $1.5 million before construction.
  • Contract must be signed between 4 June 2020 and 31 Dec 2020.
  • Construction work must happen within three months of the contract’s signing. 

State-based government support

Aside from the deposit, many Australians seeking to purchase their first property believe stamp duty is one of the biggest barriers between them and home ownership. But most states and territories offer at least some assistance on this cost, including some exemptions, for eligible first home buyers.


  • Stamp duty exemption for new homes worth up to $800,000 (temporary measure until July 31, 2021).
  • Stamp duty concessions available for new homes up to $1 million. (temporary measure until July 31, 2021).
  • Stamp duty exempt for existing properties worth up to $650,000.
  • Concessions apply for existing properties between $650,000 and $800,000.
  • One-off grants of $10,000 if you buy a new or “substantially renovated” property worth up to $600,000.
  • You may also receive the grant if you buy land to build a new home worth up to $750,000 in total (land and home).


  • First home buyers may pay $0 in stamp duty on all homes worth up to $600,000. Properties can be new or established.
  • Concessions apply for properties worth between $600,000 and $750,000.
  • $10,000 first home owner grant when you buy or build your first new home worth no more than $750,000.
  • $20,000 for new homes built in regional Victoria (until 30 June 2021). 


  • No transfer duty payable on all homes valued up to $500,000.
  • Concessions available for homes worth between $500,000 and $550,000.
  • One-off grant of $15,000 for first home buyers purchasing or building a new home of up to $750,000.
  • $5,000 may be granted after you buy or build a new home worth less than $750,000. 

Western Australia

  • No transfer duty for all homes less than $430,000.
  • Sliding scale concessions for homes worth between $430,000 and $530,000. 
  • One-off first home owner grant of $10,000 if you buy or build a new or “substantially renovated” home.
  • Value of property must be below $750,000 if south of the 26th parallel (including all Perth metropolitan areas). The 26th parallel marks the border between northern and southern Australia.
  • Value of property must be not exceed $1 million if north of the 26th parallel.
  • $20,000 Building Bonus grant for eligible applicants who build a new home on vacant land, or buy an off-the-plan home that is part of a single-tier development (such as a townhouse) before 31 December 2020.
  • an off-the-plan duty rebate of 75 per cent of the duty paid (capped at $50,000) for those buying a new unit/apartment, entering a pre-construction contract between 23 October 2019 and 23 October 2021.
  • an off-the-plan rebate of 75 per cent of the duty paid (capped at $25,000) for those buying a unit/apartment under construction, entering a contract before December 31, 2020.

South Australia

Australian Capital Territory

  • Pay no stamp duty on new or established properties of any value if you and your partner's 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.
  • Owner-occupiers exchanging contracts before 30 June 2021 may pay no stamp duty on vacant residential blocks for a single house or off-the-plan units up to $500,000. They may also have their stamp duty reduced by $11,400 for off-the-plan unit purchases between $500,000 and $750,000.


  • Half price discount on stamp duty for purchases of established homes up to $400,000 until 30 June 2022. 
  • One-off first home owner grant of $20,000 for new builds or purchases of new builds until 30 June 2022. 
  • Tasmanian HomeBuilder Grant of $20,000 for eligible new home builds (valued up to $750,000) for contracts entered into before 31 Dec 2020 (subject to income caps). 

Northern Territory

  • Stamp duty discount of up to $18,601 for existing or new homes buyers and those buying land to build a new home, at the value of $650,000 or less. 
  • $10,000 first home owner grant for new home constructions or purchases of new builds. 
  • A home renovation grant of up to $10,000 if you purchase an established property as your first home (not for owner-builders or DIY renovators). Applications close 30 November, 2020. 
  • Similar to the FHLDS, the HomeBuild Access allows new home buyers or those building their new home to take out a home loan with a deposit of as low as 2 per cent, without paying LMI. Property price caps apply. 

Non-government incentives for first home buyers

It’s not just governments offering first home buyer incentives. Some banks and lenders may also extend financial perks to this growing cohort, as they strive for business in the competitive market.

Lenders mortgage insurance discounts

Incentives from lenders can come in the form of an LMI discount. LMI is a cost that’s typically required by lenders if buyers purchase a home with a deposit smaller than 20 per cent of the property value. LMI can cost some buyers up to tens of thousands of dollars.

It’s a good idea to double check the lender’s loan-to-value ratio (LVR) requirements before deciding whether to apply for an LMI discount offer.

Lender LMI discount
ME Bank LMI discounted by 25% for LVRs up to 95%, offer valid to 30 Nov 2020
St George LMI reduced to $1 for LVRs up to 85%
Bank of Melbourne LMI reduced to $1 for LVRs up to 85%
BankSA LMI reduced to $1 for LVRs up to 85%
Virgin Money $0 LMI for LVRs up to 85%. Apply by 29 Nov 2020
BankVic 30% of LMI premium refunded to you if LVR is between 85-90% and take out a FHB loan, no LMI on LVRs up to 85%
RAMS If LVR is between 80%-95%, LMI will be refunded up to $5k with a premium of at least $1 payable for LMI by the customer
Bank First No LMI for LVRs up to 85% for Premier Package Home Loan holders where approval conditions are met
Unity Bank Offers a no LMI home loan for FHBs with LVRs up to 85%
Southern Cross Credit Union 10% off LMI for first 20 applicants - between 28 Sept and 3 Nov 2020

Source: RateCity.


While most cashbacks are targeted at refinancing mortgage borrowers, there are 10 mortgage lenders on the RateCity database which offer cashback incentives to first home buyers.

This extra cash could go a long way for many people purchasing their first home, but it’s not a good idea to simply go with the lender offering the highest cashback. Make sure to go through the terms and conditions before applying.


Lender Cashback amount
BankVic $2,000
RAMS $2,000
Heritage Bank $2,000
GMCU $2,000
Illawarra Credit Union $2,000
Credit Union SA up to $3,000
Southern Cross Credit Union $2,000
Reduce Home Loans up to $2,000
Police Bank up to $2,000
QBank $1,500

Source: RateCity.

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Learn more about home loans

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

What fees are there when buying a house?

Buying a home comes with ‘hidden fees’ that should be factored in when considering how much the total cost of your new home will be. These can include stamp duty, title registration costs, building inspection fees, loan establishment fee, lenders mortgage insurance (LMI), legal fees and bank valuation costs.

Tip: you can calculate your stamp duty costs as well as LMI in Rate City mortgage repayments calculator

Some of these fees can be taken out of the mix, such as LMI, if you have a big enough deposit or by asking your lender to waive establishment fees for your loan. Even so, fees can run into the thousands of dollars on top of the purchase price.

Keep this in mind when deciding if you are ready to make the move in to the property market.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

Does Australia have no-deposit home loans?

Australia no longer has no-deposit home loans – or 100 per cent home loans as they’re also known – because they’re regarded as too risky.

However, some lenders allow some borrowers to take out mortgages with a 5 per cent deposit.

Another option is to source a deposit from elsewhere – either by using a parental guarantee or by drawing out equity from another property.

Are bad credit home loans dangerous?

Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.

Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).

That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.

Do mortgage brokers need a consumer credit license?

In Australia, mortgage brokers are defined by law as being credit service or assistance providers, meaning that they help borrowers connect with lenders. Mortgage brokers may not always need a consumer credit license however if they’re operating solo they will need an Australian Credit License (ACL). Further, they may also need to comply with requirements asking them to mention their license number in full.

Some mortgage brokers can be “credit representatives”, or franchisees of a mortgage aggregator. In this case, if the aggregator has a license, the mortgage broker need not have one. The reasoning for this is that the franchise agreement usually requires mortgage brokers to comply with the laws applicable to the aggregator. If you’re speaking to a mortgage broker, you can ask them if they receive commissions from lenders, which is a good indicator that they need to be licensed. Consider requesting their license details if they don’t give you the details beforehand. 

You should remember that such a license protects you if you’re given incorrect or misleading advice that results in a home loan application rejection or any financial loss. Brokers are regulated by the Australian Securities & Investment Commission (ASIC), as per the National Consumer Credit Protection (NCCP) Act. 

What are the responsibilities of a mortgage broker?

Mortgage brokers act as the go-between for borrowers looking for a home loan and the lenders offering the loan. They offer personalised advice to help borrowers choose the right home loan for their needs.

In Australia, mortgage brokers are required by law to carry an Australian Credit License (ACL) if they offer credit assistance services. Which is the legal term for guidance regarding the different kinds of credit offered by lenders, including home loan mortgages. They may not need this license if they are working for an aggregator, for instance, as a franchisee. In both these situations, they need to comply with the regulations laid down by the Australian Securities and Investments Commission (ASIC).

These regulations, which are stipulated by Australian legislation, require mortgage brokers to comply with what are called “responsible lending” and “best interest” obligations. Responsible lending obligations mean brokers have to suggest “suitable” home loans. This means loans that you can easily qualify for,  actually meet your needs, and don’t prove unnecessarily challenging for you.

Starting 1 January 2021, mortgage brokers must comply with best interest obligations in addition to responsible lending obligations. These require mortgage brokers to act in the best interest of their customers and also requires them to prioritise their customers’ interests over their own. For instance, a mortgage broker may not recommend a lender who gives them a commission if that lender’s home loan offer does not benefit that particular customer.

How to break up with your mortgage broker

If you find a mortgage broker giving you generic advice or trying to sell you a competitive offer from an unsuitable lender, you might be better off  breaking up with the mortgage broker and consulting someone else. Breaking up with a mortgage broker can be done over the phone, or via email. You can also raise a complaint, either with the broker’s aggregator or with the Australian Financial Complaints Authority as necessary.

As licensed industry professionals, mortgage brokers have the responsibility of giving you accurate advice so that you know what to expect when you apply for a home loan. You may have approached the mortgage broker, for instance, because you have questions about the terms of a home loan a lender offered you. 

You should remember that mortgage brokers are obliged by law to act in your best interests and as part of complying with The Australian Securities and Investments Commission’s (ASIC) regulations. If you feel you didn’t get the right advice from the mortgage broker, or that you lost money as a result of accepting the broker’s suggestions regarding a lender or home loan offer, you can file a complaint with the ASIC and seek compensation. 

When you first speak to a mortgage broker, consider asking them about their Lender Panel, which is the list of lenders they usually recommend and who may pay them a commission. This information can help you decide if the advice they give you has anything to do with the remuneration they may receive from one or more lenders.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

What happens when you default on your mortgage?

A mortgage default occurs when you are 90 days or more behind on your mortgage repayments. Late repayments will often incur a late fee on top of the amount owed which will continue to gather interest along with the remaining principal amount.

If you do default on a mortgage repayment you should try and catch up in next month’s payment. If this isn’t possible, and missing payments is going to become a regular issue, you need to contact your lender as soon as possible to organise an alternative payment schedule and discuss further options.

You may also want to talk to a financial counsellor.