As a first home buyer (FHB), getting into the property market can be difficult for a range of reasons. With property prices rising and the economy recovering from COVID-19, your homeownership dreams may feel out of reach. However, governments have introduced a range of first home buying schemes that could help you enter the property market and get your dream home faster.
In this article, we’ll take you through the various first home buying schemes so you can make the most of this government support:
- Stamp Duty Concessions
- First Home Loan Deposit Scheme (now the New Home Guarantee)
- First Home Super Saver Scheme
- Family Home Guarantee
- What are your next steps?
Stamp Duty Concessions
First home buyers in the ACT could receive a full stamp duty discount as part of the territory’s means-tested home buyer concessions scheme. It applies to all ACT residential properties, including vacant residential land, new homes, and existing homes, regardless of their value.
To be eligible for this first home buying scheme, home buyers must be at least 18 years old and their income must be below the threshold. Buyers (at least one if you have a partner) must begin living in their home continuously for at least a year within one year of buying the property.
For more information about stamp duty concessions, visit the ACT Revenue Office page, where you can complete a quick questionnaire to determine if you’re eligible.
First Home Loan Deposit Scheme (or New Home Guarantee)
The First Home Loan Deposit Scheme, or New Home Guarantee as of May 2021, is a scheme offered to 10 000 first home buyers over the next financial year. It allows first home buyers to buy or build their dream home with as little as a 5% deposit sooner.
Previously, buyers unable to pay a 20% deposit on their home loan paid Lender’s Mortgage Insurance (LMI), a hefty one-off cost that only protects the bank if the borrower defaulted on their loan. Now, when eligible first home buyers make a 5% deposit, the government supplies the remaining 15% so buyers can access their dream home without extra charges.
You can apply as a single or couple and will have your income assessed to determine if you’re eligible. You must also prove that you:
- Are at least 18 years old
- An Australian citizen
- Haven’t owned property in Australia before
- Can meet the 5% deposit requirement
- Meet the income requirements
- Move into the property within six months of settlement and continue to live in it for as long as you’re covered by the scheme/guarantee
Currently, there are 27 lenders participating in this scheme. For more information, visit the National Housing Finance and Investment Corporation page or message our brokers for personalised financial advice.
First Home Super Saver Scheme
This scheme allows Australians to make extra contributions to their super funds. This could help you save for a deposit faster, and get your dream home sooner than you might when saving normally.
Through this scheme, buyers can make concessional (before tax) and non-concessional (after-tax) contributions to their super funds. You can apply to release these voluntary contributions and other related earnings, to pay for your deposit. Buyers can release up to $15 000 per year from their super funds for this purpose.
To be eligible for this scheme, you must:
- Live in the property or plan to live in it as soon as you’re able
- Move into the property within the first 12 months of securing it
- Live in the property for at least six months upon moving in
You can discover more about this scheme and apply for it through the Australian Taxation Office (ATO) website.
Family Home Guarantee
If you’re a single parent looking to buy a home, you may be eligible for this first home buying scheme. With the Family Home Guarantee, you could be one of 10 000 single parents who buy a home with as little as a 2% deposit.
Over the next four years, the Australian Government is offering this scheme to 10 000 single parents. This scheme is open to all single parents with dependents at home, including first home buyers. To be eligible you must be at least 18 years old, an Australian citizen, and have an annual taxable income of no more than $125 000.
For more information, check out this fact sheet from the National Housing Finance and Investment Corporation.
What are your next steps?
Although these first home buying schemes could provide you with exciting new avenues to get into the property market sooner, they can be tricky and time-consuming. By speaking with an experienced mortgage broker who specialises in services for first home buyers, you can be confident that your home buying journey will be smooth.
As an ethical mortgage broker, we put our customers, the community, and the planet before profits. Our free services compares home loans from over 30 banks and saves time by preparing your application for you. And if you secure a home loan with us, we’ll help a family doing it tough in Australia or the Asia Pacific get a home, too.
So, send us a quick message, call or schedule a consultation or apply online for personalised advice. And while you’re here, check out our ethical mortgage services we provide to customers in Canberra.
Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstances and requirements.