First-time home buyers in Australia can take advantage of several state-based incentives to significantly cut the amount of funds they need to secure their dream properties. However, these buyers must also meet strict eligibility requirements to access these grants, so a deep understanding of how each scheme works is crucial.

To help first home buyers understand how these support measures are implemented, Your Mortgage provides an overview below of the different government-sponsored benefits available to them.

First Home Owners Grant (FHOG)

State and territory governments offer cash grants to first-time buyers to assist them with the cost of purchasing a home. Called the First Home Owners Grant (FHOG), the grant is a one-off payment to first home buyers who are either purchasing an existing property that has never been lived in or constructing an entirely new house.

Who is eligible?

The eligibility criteria differ slightly in each state and territory. There are some state-specific requirements but generally applicants must meet the following to qualify:

• Must be a first home buyer as a person, not as a company or trust

• Must be at least 18 years old

• Must be a permanent resident or Australian citizen, or applying with someone who is

• Applicant or applicant’s spouse, partner, or co-purchaser must not have previously owned an interest in land in Australia, which had a residence on it before 1 July 2000

• Applicant or applicant’s spouse, or partner cannot have lived in a residential property, which they owned from 1 July 2000

• Must not have claimed the grant previously or applying with someone who have

• Must occupy the home as principal place of residence (PPOR) within 12 months of the construction or purchase and the minimum occupancy period is 12 continuous months

State-by-state grants and concessions

New South Wales

Grant: The state government offers a $10,000 FHOG for the purchase of a new home valued at $600,000 or for buying land where a new home will be constructed. The combined land and dwelling value must not exceed $750,000.

Stamp duty concessions: First-time buyers are also eligible for an exemption from transfer duty for new homes worth less than $800,000 and existing homes not exceeding $650,000, starting 1 August 2020. They can also access stamp duty concessions for new homes valued at $800,000 to $1m, and existing homes worth $650,000 to $800,000. No transfer duties apply if the vacant land where a house will be constructed is worth less than $400,000. Concessions rates only apply for land between $400,000 and $500,000.

Victoria

Grant: First-time buyers in Victoria can qualify for a $10,000 grant for urban dwellings and a $20,000 grant for regional homes worth up to $750,000.

Stamp duty concessions: Buyers of homes below $600,000 are exempt from paying stamp duty while a concession is available for homes valued at $600,001 to $750,000.

Queensland

Grant: Queensland first home buyers can avail of a $15,000 grant for homes worth less than $750,000. The state government also provides a $5,000 grant for those building a new house, unit, or townhouse in regional Queensland priced $749,999 or below. However, building contracts must have been entered into between 16 June 2020 and 31 December 2020.

Stamp duty concessions: Transfer duty exemptions are available for homes worth up to $550,000 or vacant land valued up to $400,000.

South Australia

Grant: First home buyers can receive up to $15,000 for the purchase and construction of new dwellings valued up to $575,000.

Stamp duty concessions: South Australia does not provide stamp duty concessions for first-time buyers, but they may qualify for an off-the-plan stamp duty exemption if they purchase a new or substantially refurbished apartment worth up to $500,000.

Western Australia

Grant: The state government provides a $10,000 FHOG for first-time buyers of new homes priced up to $750,000 if they are located south of the 26th parallel and for properties north of the 26th parallel worth up to $1m.

Stamp duty concessions: Transfer duty exemptions and concessions are available for buyers of homes less than $530,000 and vacant land less than $400,000.

Tasmania

Grant: First home buyers in Tasmania can access a $20,000 grant for the purchase and construction of a new home or buying an off-the-plan property.

Stamp duty concessions: Buyers of established homes are eligible for a 50% discount on stamp duty if the property is worth up to $400,000.

Northern Territory

Grant: First home buyers can access a $10,000 grant when purchasing or constructing a new home, regardless of how much the property is worth.

Stamp duty concessions: The territory government provides an up to $18,601 Territory Home Owner Discount (THOD) on stamp duty costs for first-time buyers.

Australian Capital Territory

ACT has replaced FHOG with the Home Buyer Concession Scheme, which provides a full stamp duty concession for eligible applicants.

First Home Loan Deposit Scheme (FHLDS)

The First Home Loan Deposit Scheme allows first home buyers to purchase a property for as little as 5% deposit without having to pay lender’s mortgage insurance (LMI). The scheme is limited to 10,000 borrowers in a given financial year.

However, the federal government announced last October that it is adding 10,000 places for eligible buyers for the 2020/21 financial year. These extra places are for first-time buyers purchasing newly built houses or constructing new properties.

The FHLDS is administered through the National Housing Finance and Investment Corporation (NHFIC) in partnership with several lenders.

Who is eligible?

To qualify for the FHLDS, an applicant must meet the following criteria:

• Must be an Australian citizen

• Must be at least 18 years old

• Earning $125,000 or less annually if single, or less than $200,000 a year for couples (based on latest tax return)

• Couples must be married or in a de-facto relationship

• Applicant must be able to provide a deposit of at least 5% of the property’s value

• Must be prospective owner-occupier

• Applicant or applicant’s spouse, partner, or co-purchaser must not have previously owned an interest in land in Australia

Under the scheme, buyers could purchase the following types of property:

• An existing house, townhouse, or apartment

• A house and land package

• Land together with a separate contract to build a home

• An off-the-plan apartment or townhouse

• An “eligible building contract” where buyers have a contract with a licensed or registered builder to build their home within a set timeframe

There are also property price caps, which vary from state to state. The below table shows the maximum purchase price for Australian capital cities, large regional centres and regional areas, according to the NHFIC’s website.

Source: National Housing Finance and Investment Corporation

Which lenders are participating in the scheme?

Region ID	Region	FHLDS Price Cap	FHLDS (New Homes) only Price Cap
1	NSW - capital city	$700,000	$950,000
2	NSW - regional centre (Newcastle and Lake Macquarie)	$700,000	$950,000
3	NSW – regional centre (Illawarra)	$700,000	$950,000
4	NSW – other	$450,000	$600,000
5	VIC – capital city	$600,000	$850,000
6	VIC – regional centre (Geelong)	$600,000	$850,000
7	VIC – other	$375,000	$550,000
8	QLD – capital city	$475,000	$650,000
9	QLD – regional centre (Gold Coast)	$475,000	$650,000
10	QLD – regional centre (Sunshine Coast)	$475,000	$650,000
11	QLD – other	$400,000	$500,000
12	WA – capital city	$400,000	$550,000
13	WA – other	$300,000	$400,000
14	SA – capital city	$400,000	$550,000
15	SA – other	$250,000	$400,000
16	TAS – capital city	$400,000	$550,000
17	TAS – other	$300,000	$400,000
18	ACT	$500,000	$600,000
19	Northern Territory	$375,000	$550,000
20	Jervis Bay Territory & Norfolk Island	$450,000	$600,000
21	Christmas Island & Cocos (Keeling) Island	$300,000	$400,000

Source: National Housing Finance and Investment Corporation

The NHFIC has appointed 27 lenders to offer guarantees under the FHDLS.

The National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) have started offering scheme-backed loans from 1 January 2020, while the 25 participating non-major lenders have offered guaranteed loans from 1 February 2020.

Apart from NAB and CBA, the other lenders taking part in the scheme are:

• Australian Military Bank

• Auswide Bank

• Bank Australia

• Bank First

• Bank of Heritage Isle

• Bank of Us

• Bendigo Bank

• Beyond Bank

• Border Bank

• Community First Credit Union

• Credit Union Australia (CUA)

• Defence Bank

• Endeavour Mutual Bank

• Firefighters Mutual Bank

• Gateway Bank

• G&C Mutual Bank

• Health Professionals Bank

• Indigenous Business Australia

• Mortgageport

• MyState Bank

• People’s Choice Credit Union

• Police Bank

• P&N Bank

• QBank

• Queensland Country Bank

• Regional Australia Bank

• Sydney Mutual Bank

• Teachers Mutual Bank

• The Mutual Bank

• UniBank

• WAW

First Home Super Saver Scheme (FHSS)

Introduced as part of the 2017-18 Budget, the First Home Super Saver scheme allows first home buyers to withdraw a portion of their extra super contributions and use it as a deposit for their first home. Buyers can withdraw a maximum of $15,000 per financial year, with an overall limit of $30,000.

Who is eligible?

To qualify for the FHSS, applicants must meet the following criteria:

• Must be at least 18

• Must have never owned a property before in Australia

• Must not be in the process of using FHSS to purchase other property

• Must have not requested a release of FHSS funds for a home purchase previously

Applicants must also be buying a home for residential purposes and live in the property for at least six months, within the first 12 months of ownership. The cash cannot be used to purchase houseboats, motor homes, and vacant land.

According to the Australia Taxation Office (ATO), property owners who had experienced financial hardship that resulted in the loss of ownership of a home may still be eligible to participate in the scheme, but subject to the department’s approval.

HomeBuilder Scheme

Last June, the federal government unveiled a coronavirus stimulus that grants $25,000 to Australians planning to build a new home or undertake significant renovations. The measure was due to expire at the end of the year but has been extended to 31 March 2021 at the lower rate of $15,000.

The cash grant can be used on top of existing state and territory FHOG programs, stamp duty concessions, and other support measures, including the FHLDS and FHSS scheme.

However, while first-time buyers can access the HomeBuilder grant when building their homes, the funding can only be used for construction and not for the actual purchase of the property.

Who is eligible?

To qualify for the HomeBuilder grant, applicants must be:

• A current or prospective owner-occupier, not an investor

• An individual, not a company or trust

• An Australian citizen

• At least 18 years old

• Earning $125,000 or less annually if single, or less than $200,000 a year for couples (based on 2018/19 tax return or later)

What can the grant be spent on?

The grant must be used to:

• Build a new home as a principal place of residence valued at up to $750,000, including the land

• Substantially renovate an existing home as a principal place of residence, with renovations worth between $150,000 and $750,000, and the dwelling not worth more than $1.5m before the renovation

The government stressed that renovations must improve the accessibility, safety, and livability of the home, meaning additions to the property that are unconnected to the principal dwelling such as granny flats, swimming pools, tennis courts, outdoor spas and saunas, detached sheds or garages, and landscaping cannot be part of the upgrades. However, combination works like kitchen and bathroom renos are permitted.

Applicants must also pay a licensed builder the first instalment for starting work to access the grant. They can then apply for the HomeBuilder stimulus through their state or territory revenue office. Officials will conduct checks and once all the criteria are met, they will transfer the cash directly into the applicant's chosen bank account.