If your home ownership dreams feel far from reach, you must know that there are options available. First Home Buyer Grants and Schemes can help you get in the market sooner rather than later!
We understand the difference these insights have on your journey and are here to share them with you.
What Grants and Schemes can First Home Buyers access?
Let’s start off by listing some of the options available. As a First Home buyer you can look into benefiting from the following grants and schemes when looking for the right home loan:
- First Home Owner’s Grant (formally FHOG)
- First Home Guarantee (formally FHLDS)
- Family Home Guarantee
- First Home Super Saver Scheme
- Help to Buy Scheme (likely to be available from July 2023!)
Let’s take a closer look so you can understand how these First Home Buyer Grants and Schemes can help you!
First Home Owners Grant – FHOG
The First Home Owners grant is formally known as FHOG. This government grant that can make you eligible to claim up to $15,000 towards building or buying your brand-new home.
If you are looking to buy or build a property for the very first time and are looking at a market value of $575,000 or less, then this grant might be perfectly suitable for you!
To be eligible you must satisfy these two conditions:
- be looking to make said property your main place of residence (what we often refer to as being owner-occupied), and
- ensure at least one of the applicants is a Permanent Resident or Citizen in Australia
When thinking about eligibility, there is something you must consider. This grant does not apply to the purchase of established properties. It is also not applicable to you if you have purchased any type of property before. It will really only be applicable to Genuine First Home Buyers looking to purchase a brand-new home.
First Home Guarantee – FHLDS
Are you currently struggling to save for a deposit? The First Home Guarantee might be just what you are looking for!
The First Home Guarantee enables you to get into your own home with as little as 5% deposit.
When thinking about this value, it is important to consider that government charges such as Stamp Duty and other associated costs, are still applicable.
In contrast with the First Home Owners Grant which offers you a cash injection for your deposit, the First Home Guarantee enables you to borrow a higher percentage of the purchase price of the property, making it easier to get into your first home with a significantly smaller deposit.
As a borrower, you can also expect the FHLDS guarantee to benefit you by saving on Lender’s Mortgage Insurance (LMI), which can often translate into massive savings of roughly $10,000 to $30,000 as LMI accounts for about 15% of the value of your property!
Qualify for this spectacular Guarantee with these criteria:
In order to qualify for the First Home Guarantee you must:
- be a genuine First Home buyer (not have owned any type of property before)
- an Australian Citizen earning an income below the $125,000 threshold ($200,000 for couples), and
- be considering purchasing a property as your Principal Place of Residence
The property must have a maximum purchase price of $600,000 (if based near the city and surrounding areas). For properties located in country areas or everywhere else in the state, its purchase price must be under $450,000.
Family Home Guarantee
Does the 5% deposit still feel too far from reach? With a Family Home Guarantee, you can get into your first home with as little as 2% deposit!
In a similar fashion to the FHLDS, you will still have to cover Stamp Duty and other associated costs. However, you can save substantial amounts by not having to pay for Lender’s Mortgage Insurance.
In order to be eligible for the Family Home Guarantee, you must be:
- a single parent with at least 1 dependent child, earning a maximum wage of $125,000
- looking to purchase a property that will become your Principal Place of Residence (an Owner Occupied Property), and
- an Australian citizen at present
With The Family Home Guarantee there is more flexibility if you have previously owned a property. Although you can still be eligible to receive this guarantee without being a genuine First Home Buyer, you must ensure not to own any other property at present.
First Home Super Saver Scheme
This one, you might be familiar with!
The First Home Super Saver Scheme basically allows you to make voluntary super contributions that can later be used as a deposit towards the purchase of your first home.
These contributions do not take into consideration the habitual contributions your employer usually makes towards your superannuation. Instead, they will only include the ones you choose to voluntarily make on top of these.
Something you will want to keep in mind when it comes to accessing these funds is that you can apply to access a maximum of $15,000 per year and the funds must have been sitting in your super account for at least a year before you can choose to use them towards the purchase of your first home.
For First Home Buyers who chose to access this Guarantee anytime before the 1st of July 2022, a limit of $30,000 to be accessed across all years is applicable. For those who chose to access the First Home Super Saver Scheme after the date mentioned, the maximum cap has been extended and is currently sitting at $50,000 across all years.
Since you would be planning to make these contributions regularly to your super, this scheme can be a fantastic way to set your saving goals and ensure you are building a solid deposit over time. Talking to your employer about making these contributions regular and consistent can moreover automate this process for you, allowing you to adopt a set-and-forget approach!
To be eligible for this particular scheme, you will definitely want to make sure you speak to your Rise High broker directly as there are quite a few rules and conditions to keep in mind. Being a genuine First Home Buyer (not having owned or purchased any other property beforehand), and looking to purchase a property that will become your Primary Place of Residence (be owner-occupied), are two of them.
New schemes announced for 2023!
At the very beginning of this article, we briefly mentioned a new government initiative that will soon be available for First Home Buyers to get into their new home: The Help to Buy Scheme!
The Labour Party announced the Help to Buy Scheme as an initiative that is likely to become effective from July 2023. With this initiative, you would likely be able to get into your own home with as little as 2% deposit.
The Scheme will basically operate as a shared equity scheme, which would basically enable first-home buyers to buy a percentage of the property and get into the market sooner by sharing ownership of the property with the government.
First Home Buyers who become eligible for this scheme, can expect the government to cover up to 40% of the total cost price for new properties and up to 30% of the total cost price for established properties.
Stay tuned for more details on this new scheme! We look forward to sharing more information after the government officially releases it in the financial New Year!
In the meantime, we also encourage you to check our blog on house price negotiation so you can secure the right property at the right price!
Our team at Rise High does have access to lenders who offer similar schemes at present and can accommodate shared equity arrangements for properties purchased in South Australia. To learn more about this, or the existing First Home Buyer Grants and Schemes, definitely do reach out and our team will gladly assist you in finding the right loan to help make your home ownership dreams come true!