The 4 F's when it comes to your First Home
18 min read
You might have heard that there are a few different government schemes to help you buy your first home.
There’s actually four! If you’re an Australian citizen, these schemes could help you get your foot in the property market, and we’ve explained them all for you.
And yes, you can combine the schemes if you are eligible for more than one. You can even use all four!
What could I be eligible for? | ||||
Who this is suitable for | ||||
First Home Guarantee (FHBG) | First Home Super Saver Scheme (FHSSS) | First Home Owner Grant (FHOGS) | Stamp duty assistance for first home buyers | |
You only have savings equivalent to the value of a 5% home deposit (minimum) | You want to save for your first home deposit tax effectively | You want to buy a newly constructed or off the plan home | You are buying any home | |
Earn up to $125k/year for individuals or $200k/year for joint applicants | No income limits | No income limits | No income limits | |
Value of the home is less than $900k (value varies based on state) | No home value limits | Value of the home is less than $750k (dependent on state) | Value of home is less than $800k (dependent on state) | |
Other eligibility criteria apply, check out the relevant government websites | ||||
First Home Guarantee (FHBG)
WHAT IT IS: The government acts as a guarantor, allowing eligible first home buyers to purchase a home with only a 5% deposit.
HOW YOU BENEFIT: Generally, if you have a deposit of less than 20%, you will need to pay Lender’s Mortgage Insurance (LMI) or have a guarantor who places a portion of their own home’s value as security. This is security for the bank, in case you can’t pay back your loan. With this scheme, you won’t have to pay LMI or find a guarantor if you have a 5% deposit.
Based on calculations using Your Mortgage's LMI calculator in July 2023, if you bought a $600,000 property with a 5% deposit ($30,000) you would have to pay $31,008 for LMI. This scheme could save you the cost of LMI.
THE FINE PRINT: From 1 July 2023 – 30 June 2024, there are 35,000 FHBG places are available. There are property price caps on the maximum value of the house based on location, check your area here. To be eligible, your taxable income must be less than $125,000 per annum for singles and below $200,000 per annum for couples. Check here for more information and eligibility criteria.
First Home Super Saver Scheme (FHSSS)
WHAT IT IS: Take advantage of the growth and tax benefits of super to save for your first home deposit within your super account. You can personally contribute up to $15k per year up to a total of $50k into your super account.
HOW YOU BENEFIT:
- Earn more money – money saved using the First Home Super Saver Scheme generally earns higher interest than you’d earn in a savings account. – 6.90% vs 4.10% p.a.1 Your money in super is also invested, any earnings above the deemed rate of return stay in your super account for the future. Find out more about our investment options.
- Save tax – Super is generally taxed at 15%, compared to your personal income tax rate which could be as high as 47%!
First Home Owner Grant Scheme (FHOGS)
WHAT IT IS: Get $7,000 - $30,000 towards your deposit if buying newly built or off the plan home.
HOW YOU BENEFIT: This scheme provides a grant to eligible first home buyers who purchase newly-built or off the plan, or are building a brand new home.
THE FINE PRINT: The grant varies by state, and so does the eligibility criteria for the value of the home. In NSW, for example, the newly constructed home must be valued under than $750,000. Check your state here.
As at July 2023:
State | Grant | Maximum Value of House |
NSW | $10,000 | Valued at less than $750,000 |
VIC | $10,000 | Valued at less than $750,000 |
ACT | $7,000 | Valued at less than $750,000 |
QLD | $15,000 | Valued at less than $750,000 |
SA | $15,000 | Valued at less than $650,000 |
WA | $10,000 | Valued at less than $1,000,000 |
NT | $10,000 | - |
TAS | $30,000 | - |
First Home Buyer Deposit Assistance
Stamp duty assistance for first home buyers
WHAT IT IS: Save on stamp/transfer duty.
HOW YOU BENEFIT: This assistance provides full or partial exemptions on stamp duty tax if you purchase your first home below a certain value. Stamp duty is tax that you pay when the purchase or sale of a property occurs.
THE FINE PRINT: As stamp duty taxes differ in each state, you will need to see the relevant state websites:
The amount you’ll have to pay will be based on the value of your home. If the value of your home exceeds the limit for full exemption of stamp duty, you can apply for a partial exemption.
References
- As at July 2023 the earnings rate for First Home Super Saver Scheme withdrawals is 6.90%, which we compared to the RBA’s cash rate of 4.10%, which is assumed to be equal to the interest earned on a bank account.
- Stamp duty for NSW has been calculated using the Revenue NSW transfer of land or business calculator in July 2023.
This information was prepared as at July 2023 and you should do your own independent checks of the government sources before making any decision. This is general information only and does not take account of your individual investment objectives, financial situation or needs. Before acting on it, consider if the information is appropriate and whether you need to speak to an accredited professional.
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