What Do First Home Buyers Need to Know About Government Fees and Grants?

• 8 min read • Financial Advice

Your first home will be one of the most important purchases of your life. Thankfully, there are government schemes and grants that can boost your savings and help you quickly accumulate the funds you need for a deposit. If you’re keen to take advantage of these schemes and make the most of every dollar you’ve saved, we have all the details you need below.

State-based grants can give you the head start you’ve been looking for in saving your deposit and securing a home loan. Indeed, some first home owner grants can land you more than 20% of your deposit and remove the need to incur Lenders Mortgage Insurance (LMI). With thousands of dollars on the line, it’s worth doing your homework and uncovering everything you’re entitled to claim.

First Home Owner Grants in Australia

The First Home Owner Grant (FHOG) was introduced on 1 July 2000. Though it’s a national scheme, it’s funded by Australia’s states and territories and administered under their own legislation.

Under the FHOG scheme, you can secure a one-off payment to help you secure your first home. While each state and territory governs its FHOG scheme independently, there are some general criteria you must meet to be eligible. To see if you qualify, visit the relevant link for your state or territory:

CLICK TO BOOK AN APPOINTMENT WITH AN ITP MORTGAGE BROKER

Who Is Eligible for a First Home Owners Grant?

  • You must be an individual and not a business, company, or trust;
  • You must be 18 years or older;
  • You must be an Australian citizen or permanent resident;
  • You cannot have previously owned or co-owned a home in Australia;
  • You cannot have already received any home owner grants in Australia;
  • You must move into the home within 12 months and live there for at least 6 continuous months;
  • If the home you are buying was recently renovated, it must be the first time the home has been sold after renovations, and it cannot have been lived in since being renovated.

Pro Tax Tip: Some states stipulate a maximum value for a home to be eligible for the scheme. There are also some specific occupancy criteria and exclusions.

In addition to the FHOG, many Australian states and territories offer concessions, reduced rates, and exemptions on stamp duty to reduce the costs of buying your first home. These concessions and exemptions can save you thousands, so it’s worth taking advantage of everything available in your state or territory.

First Home Guarantee (Formerly the First Home Loan Deposit Scheme)

The First Home Guarantee (FHBG) is an Australian Government initiative to help first home buyers buy or build their new home. The National Housing Finance and Investment Corporation (NHFIC) manages the FHBG as part of the Home Guarantee Scheme (HGS).

The FHGB helps first home buyers or builders save on Mortgage Insurance if they don’t have the 20% deposit most lenders require. Under the scheme, you can purchase a home with a deposit as small as 5%. The NHFIC will guarantee to a participating lender up to 15% of the value of the property purchased via an eligible first home buyer’s home loan.

Pro Tax Tip:  For the period from 1 July 2022 to 30 June 2025, the NHFIC increased Home Guarantee Scheme placements to 50,000 spots. This includes:

  • 35,000 places per year for the First Home Guarantee scheme – open to eligible first home buyers with a 5% deposit and no Lenders Mortgage Insurance (LMI);
  • 5,000 places per year for the Regional Home Buyer Guarantee;
  • 10,000 places per year for the Family Home Guarantee – open to eligible single parents with a 2% deposit and no LMI.

From 1 July 2025, the total number of placements will revert to 35,000 spots. To take advantage of this scheme, you need to apply through a participating lender.

Pro Tax Tip: In addition to the FHOG and FHGB schemes, you can also take advantage of the First Home Super Saver Scheme (FHSS) through the Australian Taxation Office (ATO).

Can I Apply for Multiple First Home Buyer Grants?

The short answer is – yes! If you’re eligible, there’s nothing stopping you from taking advantage of the FHOG, the FHGB, the FHSS, and the HomeBuilder Grant. You can also apply for stamp duty exemption. Just remember, each scheme has its own criteria and eligibility, so getting them all to align can take some manoeuvring. An ITP mortgage broker can help you make the most of every opportunity available to you.

Pro Tax Tip: Chat with a broker prior to submitting your application. Most lenders can apply for these grants upon approval of your home loan.

Do First Home Buyers Need to Pay Stamp Duty?

Stamp duty is an extra fee for buying a house, land, or investment property. It is applied by Australia’s state governments and territories. You may also have heard it referred to as ‘land transfer duty’.

Different stamp duty charges apply depending on:

  • The type of property you’re buying (primary residence or investment property);
  • Whether you’re a first home buyer;
  • Whether you’re purchasing an established home, building a new home, or buying land;
  • Whether you’re classified as a foreign purchaser.

You generally have to pay stamp duty within 30 days of settlement. Because it is an upfront cost, stamp duty can’t be covered by your home loan. So your lender or conveyance officer will usually organise the payment on your behalf.

You’ll be pleased to know that most states and territories offer fist home buyers relief from paying stamp duty in the form of concessions. Sometimes, they waive the fee altogether. Just remember that each state and territory uses different criteria, and you need to apply to receive a concession or exemption.

How Can I Make the Most of First Home Buyer Grants and Concessions?

Our expert mortgage brokers can take care of all the formalities and paperwork of organising your loan, so you can focus on house hunting with confidence. ITP offers loans on new homes, investments, refinancing options, and renovation loans. We specialise in shortening the life of your loan and saving you thousands. Phone 1800 367 487 and chat with an ITP mortgage lender today.