First home buyer guide: government grants and concessions

Learn about the several government grants and concessions available and save money on your first home

By Abigail Ocampo|01 August 2022|7 minute read

young couple moving into their first home

Are you thinking about buying your first property? As a first step, it’s a great idea to learn about the government support programs available in Australia that could cut down your home buying costs.

In this guide, we outline what they are and the different eligibility criteria.

What government support programs are available to first home buyers?

If you’re planning on buying your first home, you may be eligible for the following government home buying programs:

  • First Home Owner Grant (FHOG)
  • First Home Super Saver Scheme (FHSSS)
  • Home Guarantee Scheme
  • Help to Buy program
  • Stamp duty grants and concessions.

It’s important to keep in mind that the eligibility criteria for each of these programs will vary between states and territories.

First Home Owner Grant (FHOG)

The First Home Owner Grant1 is a one-off government payment funded by each of the states and territories. It was introduced on 1 July 2000 to offset the effect of GST on home ownership and encourage first home buyers to buy or build their first home.

The property must be used as a principal place of residence (PPR) and can be a house, apartment, unit or townhouse.

It can be newly built, purchased off the plan or a substantially renovated home. Established homes are not included in this grant.

Who is eligible for the First Home Owner Grant?

As with many of the government support programs available to first home buyers, the eligibility criteria will vary between states and territories.

However, the common criteria for this grant include:

  • You must be a first home buyer and not have previously owned any property
  • You must be 18 years or older
  • At least one applicant must be an Australian citizen or permanent resident
  • The property must be newly built or bought
  • You must be an owner occupier and intend to live in your home for a specified period
  • Your home must be valued within a certain range.

How much can you claim under the First Home Owner Grant?

The state or territory in which your property is located will determine how much you can claim under the FHOG.

  • New South Wales: up to $10,000
  • Victoria: up to $10,000
  • Queensland: up to $15,000
  • Tasmania: up to $30,000
  • Western Australia: up to $10,000
  • South Australia: up to $15,000
  • Northern Territory: up to $10,000
  • Australian Capital Territory: from July 2019, the FHOG is no longer available in the ACT and has been replaced by stamp duty concessions and exemptions.

First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme2 was introduced by the Australian Government in July 2017 to alleviate pressure on housing affordability.

This scheme allows first home buyers to make voluntary contributions into their super fund to save for their first home. They will then be able to release these contributions when they’re ready to buy a property.

First home buyers can withdraw (taking into account the yearly and total limits):

  • 100% of their non-concessional (post-tax) amounts
  • 85% of their concessional (pre-tax) amounts.

It’s important to note that you can only request one release from the FHSSS scheme and must do this within 14 days of signing your property contract.

It will typically take between 15 and 25 business days to receive the funds.

You must be 18 years of age or older to release funds but you can begin contributing funds before you are 18 years of age.

To be eligible, applicants need to:

  • Intend to be the owner-occupier of the property 
  • Intend to occupy the property for at least 6 months within the first 12 months of owning the property
  • Be a first home buyer in Australia.

Home Guarantee Scheme

The Home Guarantee Scheme is made up of three guarantees: 

  • First Home Guarantee
  • Family Home Guarantee 
  • Regional Home Guarantee.

Keep reading to find out more information about these three guarantees and the eligibility criteria for each.

1. First Home Guarantee

The First Home Guarantee3, formerly known as the First Home Loan Deposit Scheme, is a federal government initiative.

This scheme was recently extended in the 2022 Federal Budget to allow 35,000 places for eligible first home buyers, up from the previous 10,000 places.

It was created to help first home buyers purchase their first property sooner by waiving Lenders Mortgage Insurance (LMI) fees.

Did you know: Home buyers are typically charged LMI when their deposit is less than 20% of the value of their home.

This scheme allows eligible first home buyers to purchase a home with a deposit of as little as 5%, with the government guaranteeing the remaining 15%.

Who is eligible for the First Home Guarantee?

To be eligible for this guarantee, applicants will need to:

  • Apply as an individual or married/de facto couple
  • Be 18 years of age or older
  • Be an Australian citizen at the time of entering the loan
  • Earn up to $125,000 for individuals and $200,000 for couples
  • Intend to be owner occupiers of the property
  • Purchase an eligible property. This includes an existing house, townhouse or apartment, a house and land package, land and a separate contract to build a home or an off-the-plan apartment or townhouse
  • Be first home buyers in Australia.

Eligibility criteria in different states or territories may slightly vary. Property price caps for this guarantee can be viewed in the table below.

2. Family Home Guarantee

The Family Home Guarantee4 was introduced in the 2021 Federal Budget. It has since been expanded in the 2022 Budget to offer an additional 5,000 places until 2025.

This guarantee helps single parents with dependent children purchase a home with a deposit of as little as 2%, without having to pay LMI. The government guarantees up to 18% of the home’s purchase price to make up the rest of the deposit.

Although non-first home buyers are eligible to participate in this scheme, first home buyers can also benefit as long as they meet the criteria.

To be eligible, you must:

  • Be a single parent with at least 1 dependent child
  • Be an Australian citizen 
  • Have an annual taxable income of up to $125,000.

Eligible properties and property price caps for the Family Home Guarantee are the same as those for the First Home Guarantee.

3. Regional Home Guarantee

The Regional Home Guarantee5 is a new scheme that was introduced in the 2022 Federal Budget. 

It allows eligible participants to build a new home or buy a newly constructed home in a regional area with a deposit of as little as 5%. The government then guarantees up to 15% of the remaining deposit. 

While the Regional Home Guarantee is open to those who haven’t owned a home in the last 5 years, first home buyers are also eligible. 10,000 places will be open to eligible Australian citizens and permanent residents.

To be eligible for this guarantee, applicants must:

  • Be an Australian citizen or permanent resident
  • Not have owned a property in the past 5 years
  • Build or buy a new home in regional Australia (established homes are not included)
  • Be owner occupiers of the property (not purchase the property as an investment).

Information regarding income thresholds has not yet been released.

What are the property price thresholds for the Home Guarantee Schemes?

You can find the property price thresholds for the Home Guarantee Schemes in the table below.

State/territory Capital city & regional centres Rest of state Other
NSW $900,000 $750,000 -
VIC $800,000 $650,000 -
QLD $700,000 $550,000 -
TAS $600,000 $450,000 -
WA $600,000 $450,000 -
SA $600,000 $450,000 -
NT $600,000 - -
ACT $750,000 - -
Jervis Bay Territory and Norfolk Island - - $550,000
Christmas Island and Cocos (Keeling) Islands - - $400,000

Help to Buy program

The Labor Government introduced the Help to Buy program to assist those who don't currently own a land or property buy a home. It will be open to 10,000 eligible participants per year.

The program will slash home buying costs by up to 40% to allow lower deposits. The government becomes an equity partner in the property, providing an equity contribution of:

  • Up to 40% for the price for a new home
  • Up to 30% for the price for an existing home.

Prospective buyers will be able to take out smaller loans, meaning lower deposits and monthly repayments. Eligible participants must have a deposit of at least 2%. 

To be eligible, you must:

  • Be an Australian citizenBe 18 years or older
  • Earn an annual taxable income of up to $90,000 if you’re applying as an individual (or up to $120,000 if you’re applying as a couple)*
  • Use the property as your home (not an investment property)
  • Not currently own any other land or property
  • Have a minimum 2% deposit

*If your annual income exceeds the thresholds for 2 years in a row, you’ll need to pay off the government contribution.

Stamp duty concessions and exemptions

Stamp duty, also known as transfer duty, is a state and territory government tax charged when the legal ownership of an asset, such as a car or property, is transferred from one person to another.

Each time you purchase a property, you will need to pay an upfront stamp duty free. 

Stamp duty fees are calculated on a sliding scale. So, the amount you’ll be charged will depend on the type of property you buy, where it’s located and the value of the property. 

As a general rule of thumb, stamp duty will typically cost 3-4% of the price of the property. 

Each state and territory has its own eligibility requirements for stamp duty concessions and exemptions.

Can you be eligible for multiple first home buyer grants and concessions at once?

Yes, you can apply and qualify for multiple first home buyer schemes at the same time, given you meet each of their individual criteria. Due to various factors like property price caps, you may not be eligible for all of these schemes.

All our Aussie Brokers are experts in the field of home loans, including first home buyer grants and concessions. Book a free appointment today to feel confident when buying your first home.

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