What State, Federal and even Council First Home Grants are available right now? How do you access them? Can you combine them to really make a go of it?
Scribed in May 2020
Let’s cut to the chase, everyone love’s First Home Buyers. We certainly do. Here’s what the various governments will do for you:
1. The First Home Buyers Grant – $15k LARGE
Provided by the Queensland Government, the First Home Buyers Grant amount gets assessed every financial year and it is in great shape right now. Looking fantastic at $15k large (NSW only get 10).
- Neither you or your spouse can have owned property before (they do check!).
- Must be a shiny NEW property (anything that hasn’t been lived in, is under construction, or to be constructed).
- One applicant on the contract will need to be an Australian Citizen OR Permanent Resident (only one, no accent required).
- Contract price limit up to $750,000 (if you’re spending over that amount the $15k won’t mean a whole lot).
- Have to move in within a year and live in the property for 6 months.
How to Access & Use the Grant
Your broker / or bank lender (always use a broker) should apply for the First Home Owners Grant on your behalf, once your loan application has become unconditional with your bank. You will need to preview and sign that sucker. Your bank will count the funds toward your initial deposit. If you don’t need the FHOG for your deposit, you can simply take the funds as cash (make sure your finance broker knows you want to do this).
Can I Use the First Home Owners Grant as my deposit?
YES! You certainly can. It doesn’t count as genuine savings however, which many banks require 5% of unless you have a rental ledger through a real estate agent.
It can take a long time to save $15k, and it’s not often the Government is gifting you money (well until recently anyway). This can be a hugely valuable leg-up for getting into the market. Applying to only new property your options are a little limited, but that’s why we are here, to uncover all of the new property and FHOG eligible properties in your area!
2. The Federal First Home Loan Deposit Scheme (FHLDS) – GAMECHANGER
Yes folks, what started out as a cheap election ploy has turned into a gamechanger for people wanting to get into the market with less than $7k in savings.
- Property must be below $475,000 (in South East Queensland)
- Buyers must be Australian Citizens (a little harsh to Permanent Residents)
- Can be a new OR old property (buy a do-er-uppa).
- Buyers need to have 5% genuine savings (but there are work-arounds)
- Buyers must earn LESS than $125,000 for a single, and $200,000 for a couple.
So How Does the FHLDS work?
Effectively Scott Morrison will guarantee 15% of the deposit for your loan (not Scott personally, but the Federal Government). This means you only need 5% genuine savings to buy a property AND you will not pay any Lenders Mortgage Insurance (LMI).
LMI is an evil (yet necessary) insurance that banks are required to impose on any loan with a deposit less than 20% in Australia. Because this guarantee effectively means you have a 20% deposit (5% + 15%), you don’t pay any LMI. This saves you between $8,000 – $12,000 on the funds required for your purchase.
I Need an Example!
Explaining the Federal Home Loan Deposit Scheme can get a little complex, so we’ve created a video to do it in simple terms. See the video below!
3. The Stamp Duty Concession! – A Reliable Saver.
The trusty Stamp Duty Concession, the under-loved concession savings 1000’s of Queenslanders 1000’s of dollars every year.
1. Buyer(s) must not have owned before in Australia
2. You have to live in the property as your principal place of residence for at least 12 months
What do you get
You don’t pay stamp duty on any purchase of a completed or single contract property up to the value of $504,000! After this it increases gradually until your paying full stamp duty at $550k.
If you are buying land and building, you only pay stamp duty on your land purchase. You are stamp duty free up until $250,000 for your land.
What does this mean in dollars
You’re saving $8,750 you would need for a $504,000 purchase, and $7,175 on the $250,000 land purchase. Significant amounts, much better than a kick in the teeth.
How do I apply for this?
You don’t need to, your conveyancer should make sure all the right boxes are ticked when managing your purchase.
4. First Home Super Saver Scheme
Another relatively unknown Federal Government scheme.
- You can put away up to $15,000 of pre-tax income into your super each year. Unfortunately this does not include mandatory contributions for government employees (we’ve asked).
- The maximum you can contribute and remove for the purposes of this scheme is $30,000.
- Same as the others, need to live in the property for 12 months and it be your first home.
5. Brisbane Council First Home Buyer Rates Saver
Couldn’t ignore this one either! The Brisbane City Council will give you a 50% remission of your rates notice for the first 12 months in your new first home! How terribly generous of them.
So far, this only applies to homes within the Brisbane City Council region, and can save you up to $1000 as you get used to mananging your mortgage repayments.
Some very naughty people have been taking $10,000 out of their Super under the pretenses of Covid struggles and using this toward a house deposit. Whilst we do think that your super money is well spent getting a foot in the property market, we DO NOT endorse taking advantage of Covid relaxations to do so. No sir.
7. The Mighty Hello Home Grant
If you are going to buy new, we strongly recommend you come talk to us first (as we would). We’re a little different from your typical property mob, in that we split our sale commission with you and can provide you with between $5 and $20k to assist in the purchase of your first home. This is a completely non-refundable gift, no strings, just sharing the love, win-win, all that :). The even better part is we are limited to any particular property, we approach every developer to negotiate a sales fee which we can share with you.