Buying your first home is a big undertaking and can seem daunting, but there is plenty of financial help available if you know where to look.
With house prices remaining historically high, along with a recent trend of rising interest rates, it is important for you to be across the latest support. That’s where our team can help!
In this blog, we take a look at how first home buyers in Victoria can benefit from the grants, support programs and savings on offer.
First Home Guarantee (and Regional First Home Buyer Guarantee)
This enables an eligible home buyer to buy a home with as little as 5% deposit without paying Lenders Mortgage Insurance.
This can assist in purchasing a home sooner without needing to build up a 20% deposit and can result in a saving of around $24,000 for a first home worth $600,000.
This is in addition to the potential Stamp Duty Savings mentioned further below in this blog.
This is a potential option for first home buyers regardless of their occupation but there are certain limits on eligibility that apply, such as:
- purchase price caps of $800,000 in a Capital City and Regional Centre’s such as Geelong, Gold Coast etc
- purchase price caps of $650,000 in the rest of Victoria
- For single applicants your taxable income for the previous financial year needs to be below $125,000
- For joint applicants the combined taxable income for the previous financial year needs to be below $200,000
More details and reading can be found on the Housing Australia website.
Stamp duty savings
In Victoria, stamp duty has been abolished for first home buyers who are purchasing a house for $600,000 or less. This can mean a saving of around $20,000 for a new home worth $500,000.
The cost of stamp duty then increases gradually for properties worth up to $750,000. Again, there are eligibility requirements, with details available on the State Revenue Office website.
The First Home Buyer Grant
A $10,000 First Home Owner Grant is available when you buy or build your first new home. This grant is open to people buying a new home for less than $750,000. A new home “can be a home that has been substantially renovated, or a home built to replace demolished premises”.
In addition to these criteria, there are several more steps to take to confirm your eligibility for this grant, including living in the property for at least 12 months after purchase. A full run-down of conditions on the FHBG can be found on the State Revenue Office website.
Victorian Homebuyer Fund shared equity scheme
This State Government scheme is another way to make it easier to buy your first home, although it does come with a significant catch. Under this program, the government the Victorian Government will contribute up to 25 per cent of the purchase price if you have a 5 per cent deposit.
The trade off is that in exchange for this financial support, the government gets “an equivalent share in the property”. The maximum purchase price in country Victoria is $700,000, while in Melbourne and Geelong it is $950,000. Learn more about this scheme, including its eligibility requirements and how it saves you money on insurance, by visiting the Homebuyer Fund website.
A similar scheme, called the First Home Guarantee, is also available through the Federal Government if you are struggling to save enough for a deposit. Under this program, a first home can be bought with as little as a 5 per cent deposit if you are eligible.
First Home Buyers Super Saver Scheme
This is another Federal Government scheme that is open to first home buyers in Victoria. Put simply, the First Home Buyers Super Saver Scheme allows you to take advantage of the interest rates that apply to your superannuation savings.
Under this program, you can make extra contributions to your super account, then withdraw some of the money to help with your purchase. But this is a complicated process, with a range of tax rules applying to eligible savers. We recommend talking to our team before embarking on your journey.
How we can help
While this summary is focused on the options available in Victoria, there are similar grants schemes in place around Australia. But the purchase amounts and grants vary from state to state. So, make sure you aware of the different conditions in place elsewhere if you are considering an interstate purchase.
As you can see, there is a huge variety of Government support available. To help you take advantage of this help, talk to our team about which grants or saving schemes might work best for you.
If you’re not eligible for the Grants and Schemes we’ve mentioned above, we can also discuss how guarantor loans work if you have family or a parent willing to consider; this can also be another way to avoid Lenders Mortgage Insurance. We are here to support you and guide you through the process so don’t hesitate to reach out.