First home buyer incentives around Australia
Recognising the difficulties for first home buyers, State and Federal governments have introduced a broad range of grants and stamp duty concessions to help ease that all important purchase.
Summarized below are the grants and concessions by State / Territory. Always double check the concessions are still applicable when you’re making your purchase as the requirement can change with little notice.
Australian Capital Territory – First Home Owner Grant
ACT residents can access a $10,000 lump sum for new or substantially renovated properties purchased on or after 1 January, 2016, that are valued at $750,000 or less. Eligible purchases made between 1 September, 2013 and 31 December, 2015 may qualify for a higher grant of $12,500.
There’s a home buyer concession too, where first home buyers who purchase or build a new property are charged stamp duty at a ‘concessional’ rate. The ACT Government also requires you to live in the property for 12 months.
Tasmania – First Home Builder Boost
Tasmanian first home buyers are entitled to a generous $20,000 lump sum if they meet the requirements of the First Home Builder Boost grant and purchase a new home. That’s based on the condition that they live in the property for at least six months and move in within the first 12 months of the home being built.
South Australia – First Home Owner Grant
The SA FHOG is currently $15,000 for eligible first home buyers. It applies to the purchase or construction of a new residential property, including a house, flat, unit, townhouse or apartment that meets local planning standards anywhere in South Australia.
In addition, should you purchase an off-the-plan apartment and sign the contract between 22 June 2017 and 30 September 2017 you may also be eligible for a new $10,000 pre-construction grant.
Western Australia – First Home Owner Grant
Western Australia offers a $10,000 grant to first home buyers who purchase or build a new property to live in. But better still, if an eligible contract was made in January, 2017, homeowners qualify for a $5,000 ‘boost payment’. If you’re thinking of stepping on the property ladder in WA, note that to access the grant you’ll need be an occupant for six months in the first year of the house being built.
There’s also a Home Buyers Assistance Account available to first home owners purchasing an older home costing less than $400,000 that provides a grant of up to $2,000 for some of the upfront expenses like pest and building inspection fees, conveyancer fees, and upfront home loan fees.
NT Financial help for first home buyers
First home owner grant – If you want to buy or build a new property as your first home, you can apply for the first home owner grant of up to $26,000. Find out more about the first home owner grant at the First Home Scheme website.
Household goods grant – If you buy a new property as your first home, you may be able to get a grant to help you buy household goods. You can get up to $2,000 under the household goods grant.
First home owner discount – If you want to buy an established property as your first home, you may be able to get a discount on the stamp duty you need to pay. You can get a discount of up to $23,928.60 under the first home owner discount scheme.
Home renovation grant – If you buy an established property as your first home, you may be able to get financial help to renovate or improve it. You can get up to $10,000 under the home renovation grant.
First Home Super Saver Scheme (Australia-wide)
If you’re still working towards that first home deposit, give some serious thought to the First Home Super Saver Scheme. The nationwide scheme, is set to help thousands of young Australian residents fast-track their savings by allowing them to make additional super contributions.
How it works: For those who are yet to take their first step on the property ladder, there is an opportunity to make additional super contributions of up to $15,000 annually by sacrificing a portion of their salary. As soon as you have made $30,000 worth in contributions (which would take at least two years) via the scheme, they’re required to withdraw the funds from their super fund account for the purpose of including it in a first home deposit. The good news is, that couples are not excluded from the scheme, meaning they can save up individually and pool their money together after withdrawing the funds.
Tax benefits: What makes this scheme so lucrative for first home buyers are the tax benefits, as additional super contributions are taxed at a light 15%. Despite the fact that the Australian Taxation Office applies a tax rate to all funds withdrawn through the scheme as well, which is 30% below the marginal tax rate of the saver, first home buyers still wind up better off than if they’d simply used a high interest savings account for the same purpose.
For instance, Mozo.com.au calculated that an Australian resident on an $80k salary who makes an additional super contribution of $15k each year, would end up with $25,603 after two years. This is a whopping $5,297 more than what the best savings account at the time of writing could give a saver with a 3.05% interest rate attached.
Note that the grants and schemes undergo regular changes, therefore always check the latest information relevant to the State or Territory of your focus. A good mortgage broker should also be across the latest changes, and if they’re not . . .move on to one that can really help you.
Buy smarter = limitless ways to build lifetime income
Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property. A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income.
Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. A licensed real estate agent, Debra also holds a Bachelor of Commerce and Master of Business.
Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
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