Unlocking Government Assistance for First Home Buyers
Navigating the journey to home ownership can be daunting, but understanding the available government assistance programs can significantly ease the financial burden. These options can make buying your first home more accessible and affordable.
Key Federal and State Government Programs
1. First Home Owners Grant and Stamp Duty Savings (Each State)
Each state has a different program that can help first home buyers get into the market, offering stamp duty exemptions, concessions or a lump sum grant. It’s worth checking what you qualify for and what savings are available in your state.
2. Home Guarantee Scheme
A federal government initiative allowing qualifying borrowers to get into the market with only a 5% deposit without paying LMI. Restrictions apply to income, property prices and borrower type.
3. Family Guarantee Scheme
Helping single parent families get into the market with only a 2% deposit without paying LMI. Restrictions apply to income, property prices and borrower type.
Victorian First Home Buyer Incentives
If you’re a first home buyer buying a property in Victoria, there are possibly 4 government incentives available to you:
1. First Home Buyer Stamp Duty Exemption or Concession
A one-off duty exemption for your principal place of residence (PPR) valued up to $600,000, or a concession for a PPR with a dutiable value from $600,001 to $750,000. This duty exemption/concession is separate and distinct from the First Home Owner Grant — the grant is a payment made to you, whereas the first home buyer duty exemption/concession is a reduction in the amount of land transfer duty you pay.
2. First Home Owners Grant
A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home. Your first new home can be a house, townhouse, apartment, unit or similar. The contract price for the home must be $750,000 or less (or, for a home you build, the contract to build price must be $750,000 or less). A new home has not been sold previously as a place of residence, or occupied.
3. The Home Guarantee Scheme (HGS)
The HGS is an Australian Government initiative to support eligible home buyers to buy a home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, and includes three types of guarantees:
- First Home Guarantee (FHBG): supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%.
- Regional First Home Buyer Guarantee (RFHBG): supporting eligible regional home buyers to buy a home sooner, in a regional area, with a deposit as little as 5%.
- 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%.
Victorian price cap: $800,000 for Capital City and Regional Centre, $650,000 for the rest of the state.
4. The Victorian Homebuyer Fund (VHF)
The Victorian Homebuyer Fund is the Victorian Government’s shared equity scheme, supporting thousands of Victorians into home ownership. The Victorian Government makes a financial contribution to the purchase of a home in exchange for an equity share in the property, which participants can buy back over time.
Through the scheme, the Victorian Government provides eligible participants with a contribution of up to 25% of the purchase price of the home. Participants need to contribute a minimum of 5% of the purchase price and cover any acquisition costs, such as stamp duty and conveyancing costs. The remaining amount is secured through a home loan from a partner lender. Additional supports are available for Aboriginal and Torres Strait Islander participants.
Participants are required to buy back the government’s share in their property over time, through refinancing, using accumulated savings, or upon sale of the property. The Victorian Government doesn’t charge interest on its investment in participants’ homes, but shares in any capital gains or losses proportional to its share in the property.
Wondering If You Qualify for Government Assistance?
Buying your first home is a big step, but with the right preparation and knowledge, you can handle it with confidence. Every situation is unique, so feel free to reach out for a no-strings-attached chat to talk about your specific needs.