The search for your first home
When you are out scouting for your first home, you might jump on Google and find ads offering “cheap homes for sale”. Take those ads with a grain of salt! Real estate property prices around Australia have been climbing despite rising interest rates. Since CoreLogic’s national Home Value Index bottomed out in Jan 2023, values have increased 11.1%. The average price of Australian residential property has grown by more than 80% over the past ten years.

That’s not good news for aspiring first home buyers, as it takes an Australian couple aged 25-34 an average of 5 years to save a 20% deposit for an entry-level home in Australia’s capital cities. Given the rising cost of real estate, the sooner homebuyers can purchase the better and that’s why our Governments have stepped in to provide assistance.


Home Guarantee Scheme
A 5% deposit is now all that is required under the First Home Guarantee and Regional First Home Buyer Guarantee and just 2% for single parents/guardians under the Family Home Guarantee. Requiring a substantially lower deposit means eligible home buyers are able to buy a home much sooner without having to pay mortgage insurance. Family members may even be able to assist with a cash gift if saving this reduced amount is still difficult.

It’s a feel-good story! Since its inception in 2020, the scheme has helped over 27,000 frontline employees, including teachers, nurses and emergency service workers, and over 51,000 regional Australians. 51% of participants are women, and 55% are under the age of 30. The scheme has put 150,000 people on the fast track to home ownership!

Analysis by the National Housing Finance and Investment Corporation (NHFIC) shows that home buyers using these schemes have been able to bring their home purchases forward by an average of 4 years, saving them from endlessly chasing the tail of the Australian property market!

Not everyone has access to the schemes, but if you’re looking for a home to live in, your income is below the threshold and you’re an Australian Citizen or permanent resident who hasn’t bought a home in the last 10 years, you’re in with a chance. Getting expert advice will send you on the right path.


State-based offerings
In addition to the Federal government scheme, there are also a range of state-based concessions available to first home buyers, to help ease the burden of taxes like stamp duty. Loanscope also has a stamp duty calculator to make it easier.

The concessions vary from state to state. Here are some examples:


Victoria
Properties with a dutiable value of $600,000 or less can receive the first home buyer stamp duty exemption. This means no stamp duty is paid. Above $600,000 to $750,000 the first home buyer stamp duty concession kicks in. For example, if an eligible first home buyer purchases an established home for $650,000, the stamp duty saving would be over $22,000.


New South Wales
First home buyers in New South Wales can get a full exemption from transfer duty if they are buying a new or existing home valued up to $800,000. For a purchase of say $750,000, this equates to savings of over $28,000. Homes valued over $800,000 and less than $1,000,000 may qualify for a concessional rate. Vacant land valued below $450,000 may also attract transfer duty savings.


Queensland
Queensland also provides transfer duty concessions and exemptions to first home buyers. No duty is payable on homes valued under $550,000. This can save you up to $15,925. For those purchasing land valued at up to $400,000, potential savings of $7175 are on offer.


First home owners grant (FHOG)
FHOG has taken a back seat to the home guarantee scheme since its commencement because it only applies to the purchase or construction of a new home. This can be less attractive than the purchase of an established property, especially given the recent supply cost issues in the building industry. The grant is a one-off payment which again varies between states. In Queensland a first home buyer could receive $30,000. In Victoria the FHOG only applies to new homes valued at $750,000 or less and is $10,000. NSW offers the same amount for purchases up to $600,000 and land purchases with construction up to $750,000. Citizenship/residency requirements apply as do timeframes to move into and live in the property. FHOG is there to help first home buyers purchase a new home. Investors are not eligible for the grant.


Getting advice
Absorbing all of this information and using it to formulate a clear plan can be challenging for first home buyers. This is why it could pay to get third party assistance from an expert. A mortgage broker would be a great choice. A reputable broker will complete an individualized assessment, answer all of your questions, and tailor a high-quality lending solution specific to your needs and goals. Advice and information on the grants, concessions, and schemes that are available is part of this comprehensive service.


Looking to start your home ownership journey sooner?

Loanscope 
has helped hundreds of first home buyers get on the property ladder. We are experts at identifying what Government incentives may be available and relevant for your specific circumstances. Contact us for more information via the link here.
Emmanuel Guignard (MBA)
Director & Principal Mortgage Broker
With over 15 years’ experience in the finance industry and a recently completed MBA in Financial Planning, Emmanuel leads the broking team at Loanscope. His experience includes working with a wide range of property investors, from first time buyers to investors with large property portfolios. This includes handling complex applications involving trusts, company structures and self-managed super funds. He also operates as a qualified mentor to other mortgage brokers via the FBBA mentor program.
Emmanuel Guignard