Many Australians are facing economic hardship brought about by the coronavirus (COVID-19) pandemic with first home buyers among the hardest hit. However, for those with secure employment, this year may prove to be a fruitful opportunity to crack into the housing market.
The new HomeBuilder grant gives $25,000 to people who are building a new home or buying off the plan up to the value of $750,000. And, for first home buyers, there are other concession and grants they can use to get a foothold in the property market.
Making the mst of grants
Cameron Kusher, executive manager for economic research at REA Group, says first home buyers are dominating the current market with government grants playing a large role.
Furthermore, interest rates are the lowest they’ve ever been; home prices, while not expected to go into “freefall”, are tipped to decline; and the recently introduced First Home Loan Deposit Scheme is another tool up the sleeve of first home buyers.
“Government stimulus such as first home buyer grants have been a successful driver of demand in recent years, and the HomeBuilder scheme will likely be no different in bringing forward demand from this buyer group between now and the end of the year,” Kusher says.
“First home buyers who are still employed and have a solid deposit may see the introduction of HomeBuilder as an opportune time to build or purchase a new home.”
“If you’re in stable employment this could turn out to be one of the best times for first home buyers that we’ve seen in recent years, This is because you could be eligible for more than one first home owner grant or assistance scheme.”
First home buyers need to do their homework. She advises first home buyers save hard; research the grants and concessions that are available; talk to a bank manager or mortgage broker; and, if buying off the plan, look into the reputation of the developer. But getting into the right mindset is also key.
“Unless budget is no object, your first home is rarely ever your dream home.” she says. “You need to have a good idea of what matters most to you — if it’s living close to the city then you may have to compromise on space. If you want more space, you might have to live further from the city.”
What grants are available?
To make the most of grants and concessions, knowing what properties are eligible – and in your price range – is an important first step.
“Grants are generally only available on new homes, units, apartments or townhomes, while price caps usually apply,” Wood says.
So, where do the country’s different states’ and territories’ first home owner grants currently sit?
(*Check your relevant state or territory’s page for full eligibility requirements and additional home buyer assistance schemes.)
The ACT phased out their FHOG from 1 July, 2019, replacing it with a home buyer concession scheme.
Under the new provisions, first home buyers pay no transfer duty.
All types of property, up to any price, are eligible. However, there are some income thresholds for applicants.
More information: ACT Revenue Office
In NSW, first home buyers can receive $10,000 towards a new home that no one has lived in before, up to a purchase price of $750,000.
The First Home Buyers Assistance Scheme offers complete stamp duty exemptions on properties up to $650,000 and partial concessions on properties between $650,000 to $800,000.
More information: NSW Revenue Office
Territorians can apply for $10,000 towards a newly constructed first home.
More information: nt.gov.au
A $15,000 grant is available for Queenslanders who are building or buying a new home, up to a value of $750,000.
You can also apply for a first home concession on transfer duty for home valued up to $500,000 up to $15,925. A home concession may still apply on properties above this price.
More information: qld.gov.au
Eligible South Australians can apply for a $15,000 grant on newly built properties up to the value of $575,000.
First home builders who are still constructing on June 30 (the date state land tax is calculated) can apply for an exemption if they intend to move into the property as their primary place of residence before June 30 of the following year.
More information: RevenueSA
First home buyers in Tasmania who are buying or building a new home can receive $20,000 up to 30 June 2022.
A 50% transfer duty concession is available to first home buyers on established properties valued at or below $400,000.
More information: State Revenue Office of Tasmania
$10,000 or $20,000*
Victorians buying or building a new home may receive $10,000 in metropolitan Melbourne or $20,000 if they are in a regional area.
Grants are available on properties up to a price of $750,000.
A list of regional locations is available on the State Revenue Office of Victoria’s website.
A stamp duty exemption is available on first homes valued below $600,000. Concessions are available for properties priced between $600,000 and $750,000.
Additional concessions are also available for certain buying groups and demographics.
More information: State Venue Office Victoria
In WA, those buying or building a new home can apply for $10,000.
First home buyers may be eligible for a concessional rate of transfer duty concessions, potentially including established stock. Check the government website for eligibility requirements.
More information: WA Department of Finance
Don’t forget to check out the First Home Loan Deposit Scheme. It helps first home buyers make a purchase with a 5% deposit, without having to take up Lenders Mortgage Insurance (LMI).