Housing grants for everyday Australians

Federal Government Grants for Australian First Home Buyers

Are you a first home buyer seeking more information on the housing grants available to you? Take a look at our summary below which outlines the main Federal Government grants available to Australian first home buyers. We have included relevant links for those seeking further information, as well as links to state and territory-specific schemes.

There are currently (at the time of writing) 3 major Federal Government schemes available to first home buyers. If you require further clarification on these or are unsure of your eligibility, chat with your local MoneyQuest mortgage broker for more information.

First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes)

The First Home Loan Deposit Scheme (New Homes) enables eligible first home buyers to build a new home or purchase a newly built property with only a 5% deposit (lenders criteria apply), without having to pay lenders mortgage insurance (LMI). This includes newly-constructed dwellings, off-the-plan dwellings, and house and land packages, as well as the purchase of land with a separate contract to build a new home.

Usually, first home buyers with less than a 20% deposit are required to pay LMI, however under this scheme, eligible first home buyers have the opportunity to enter the market with a deposit of as little as 5 per cent without having to pay LMI because the National Housing Finance and Investment Corporation guarantees up to 15 percent of a property’s value, so that the 20% deposit threshold is reached.

As of July 1, 2021, an additional 10,000 FHLDS (New Homes) places were made available for the 2021-22 financial year.

For more information, click here

Family Home Guarantee

The Family Home Guarantee is designed to help single parents purchase property. As of July 1 2021, the Family Home Guarantee will provide eligible single parents with dependants, the opportunity to build a new home or purchase an existing property with only a 2% deposit, subject to the individual’s ability to service a home loan. The Australian Government will guarantee up to a maximum of 18% of the purchase price, enabling the borrower to secure a loan without paying lenders mortgage insurance.

This scheme is available to both first home buyers and previous owner-occupiers who do not currently own a home. 10,000 places will be made available over a four-year period, and applicants must be Australian citizens, over the age of 18, and have an annual taxable income of no more than $125,000.

For more information, click here

First Home Super Saver Scheme (FHSSS)

The First Home Super Saver Scheme allows first home buyers to save for their first home deposit within their superannuation fund. First home buyers can make voluntary concessional (before tax) and non-concessional (after tax) contributions to a separate account within their super fund, which can later be released and used towards a house deposit. The benefits of this include:

– voluntary concessional super contributions are usually taxed at just 15%, as opposed to the individual’s marginal income tax rate
– voluntary non-concessional contributions are not taxed at all
– first home buyers can release a deemed rate of earnings on top of their contributions

The Australian Government recently announced that it plans to allow eligible individuals to release up to a maximum of $50,000 in voluntary contributions from July 1, 2022. Currently, the maximum amount those eligible can release is $30,000.

For further information and eligibility requirements, click here

In addition to the three Federal Government schemes listed above, there are other grants, schemes and concessions available to first home buyers, offered by each state and territory government. See the links below for further information:
ACT
NSW
NT
QLD
SA
TAS
VICTORIA
WA

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Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.