Buying a first home? In this economy?!
Like many other first home buyers, you’ve probably been keeping a watchful eye on fluctuating house prices and rising interest rates, all while saving for a deposit and finding the perfect property. Buying a first home is no mean feat!
While it can be daunting at times, don’t worry! There are support systems available specifically for first home buyers, designed to make the process more accessible and affordable.
We’ll walk you through a couple of different schemes here, including their differences and advantages and some of their eligibility requirements.
What Types of First Homeowners Schemes are Available?
There are a variety of first home buyers grants and schemes available in 2024, and they all suit different types of homebuyers. For example, some assistance schemes allow buyers to put up less deposit for a property, whereas some reduce the fees needed to purchase a home.
Some schemes and grants are offered by the Federal Government, such as the First Home Guarantee and the First Home Super Saver Scheme. The state governments also offer their own schemes and grants, so there may be differences depending on if your home is in New South Wales or Queensland. Lenders may also offer their own schemes, so we have a lot to cover!
2024 National Home Ownership Schemes and Grants
Home Guarantee Scheme
First on our list, the Federal Government’s Home Guarantee Scheme. This project consists of the First Home Guarantee, Family Home Guarantee, and Regional Home Guarantee schemes. These schemes involve the Government guaranteeing a buyer's loan, meaning buyers can secure a loan with a lower deposit.
The First Home Guarantee and Regional Home Guarantee are designed specifically for first home buyers. Buyers have to provide a deposit of at least 5%, depending on their lender, and the Government will co-purchase up to 15% of the property’s price, which helps avoid Lender’s Mortgage Insurance (LMI). For the Regional Home Guarantee, buyers have to be purchasing a home in a regional area.
The Family Home Guarantee is a little different, as it can be utilised by single parents who aren’t necessarily first home buyers. For this scheme, buyers put forward a deposit of at least 2%, and the Government can co-purchase up to 18%.
All these schemes have further eligibility criteria, such as income thresholds or property price caps, so if you are interested in any of these schemes be sure to get the most up-to-date information for 2023 on the Government’s website.
Help to Buy Scheme
The Federal Government’s Help to Buy scheme is up next, and while it's pretty similar to the Home Guarantee Schemes it has a few differences. This scheme is set to be available to buyers across the country but hasn’t come into effect just yet. Essentially, this scheme will allow buyers to only put up a deposit of 2%, with the Government acting as guarantor on the loan.
This means that the Government is purchasing a share of equity in your home, that you can eventually pay off.
One of the interesting things about this scheme is that it is not only for first home buyers, but also for people who don’t currently own any property.
As with the schemes we mentioned earlier, there are several eligibility requirements to be aware of. Keep in mind, though, that as this scheme is not active yet the eligibility requirements and other aspects of this scheme may change in future.
First Home Super Saver Scheme
Features and Benefits
The First Home Super Saver Scheme, known as the FHSS scheme, allows first home buyers to use the voluntary contributions they made to their super to buy a home. Through the scheme buyers can contribute up to $15,000 per financial year into their superfund, capping out at a total of $50,000. These contributions can be made both before tax, for example through salary sacrifice contributions, or after tax, in the form of personal voluntary super contributions.
An advantage of this scheme is that if you are buying a property with multiple people, each buyer can access their own super contributions. Even if one person has already used the scheme, another buyer can still apply even if they’re buying the property together.
While the FHSS scheme is designed for first home buyers, other buyers may be eligible if they have experienced hardship, which we’ll discuss more below.
Eligibility Requirements and Considerations
To be eligible, buyers must be over 18 years old and intend to buy their home in Australia. Unlike the other schemes, buyers don’t have to be Australian citizens and there are no wage or property caps. Buyers have to move into their home as soon as practically possible after buying, and they have to live there for at least six months during the first year they own the property.
As we mentioned earlier, if a buyer has suffered hardship they may still be eligible for the scheme even if they’ve previously owned property. Hardship can include divorce or separation, bankruptcy, job loss, illness, or a natural disaster.
An important point is that buyers can only access the FHSS scheme and release their contributions once. In addition, it can take some time for applications to process and your funds to be released. If you are interested in this scheme, it would be a good idea to check out the ATO’s website and their helpful fact sheet for more information on the application process and the timing restrictions before committing.
One last thing to consider is that if you have an outstanding Commonwealth debt, the funds you release through this scheme may be used to offset your debt or there may be delays in receiving your funds.
2024 State Home Ownership Schemes and Grants
First Home Owner Grant (NSW)
Features and Benefits
The First Home Owner Grant is offered by the NSW Government and provides first home buyers with $10,000 if they buy or build a new home, or buy a substantially renovated home. For buyers looking at a new house, apartment, or unit, or who are looking at buying off the plan, this grant can give them a big advantage. This grant is also available for buyers purchasing vacant land with plans to build a property.
A benefit of this grant is that if you are buying a property with other people, only one person has to be an Australian citizen or permanent resident. Even though this grant is designed for first home buyers, you may still be eligible if you bought a home after the 1st July 2000 and didn’t live in it for more than six continuous months.
The Queensland government has an almost identical scheme that offers a $15,000 grant, but there are some minor differences in eligibility requirements that we’ll mention below.
Eligibility Requirements and Considerations
There are a few eligibility requirements to be aware of, so let’s go through them.
Firstly, the property must be either new or substantially renovated. It cannot be used to buy an existing home. If a home has been previously lived in, used as accommodation, leased, or sold before, it is not counted as a new home under the grant.
If the home has been substantially renovated, it must not have been lived in, used as accommodation, or leased before, during, or after the renovation. As a side note, to be considered substantially renovated most of the home must have been either removed or replaced.
In addition, the property you intend to buy must not exceed the property price caps for this scheme. In NSW, if you are buying a new home, apartment, unit, or similar, the price cap is $600,000. If you are purchasing land and plan to build a property on it, the price cap is $750,000 including the cost of the land, the value of the comprehensive home building contract, and the cost of any building variations.
In Queensland, the price cap is $750,000 for all homes, apartments, units, and land. Same as NSW, though, if you are buying land and intend to build a home all the costs must come under $750,000 to be eligible.
Buyers must also live in their home within 12 months of buying it or completing construction, and then occupy it for at least six continuous months or risk having to repay the grant.
As with many of the other schemes and grants mentioned, to be eligible you must be a first home buyer unless you qualify for the exception we mentioned earlier.
One last requirement we’ll mention is that if you are buying a property with other people, none of the parties must have used the grant before. If one of the people buying the property has previously utilised the grant, the purchase will be ineligible. On a related note, only one grant is available per purchase, not per person. For example, if you are buying a property with a partner you can apply for one grant, you won’t receive two grants.
First Home Buyer Assistance Scheme (NSW)
Features and Benefits
Stamp duty 2023 - What NSW and QLD home buyers need to know
This scheme is available to buyers purchasing existing homes, new homes, or vacant lots, making it more versatile than the First Home Owners Grant.
Eligibility Requirements and Considerations
To be eligible for this scheme buyers must be over 18 years old, and if buying with multiple people at least one person must be an Australian citizen or permanent resident. All buyers involved must not have previously owned a property and can’t have used this scheme before.
Similar to the First Home Owner’s Grant, buyers must move into their home within 12 months of purchase, and live there for at least six consecutive months.
Depending on the cost of the property, buyers may be entitled to either a concessional rate of transfer duty or an exemption, as summarised in the table below:
| New or Existing Homes | Vacant Land | |
| Exemption | Home's value is less than $650,000 | Land's value is less than $350,000 |
| Concession Rate | Home's value is between $650,000 and $800,000 | Land's value is between $350,000 and $450,000 |
You can find out more about transfer duty for NSW or Queensland in another article we have prepared on stamp duty.
2024 Bank First Home Ownership Grants and Schemes
Guarantor Loans and Family Pledges
Features and Benefits
If you are having trouble saving for a large enough deposit, another option to consider is to take out a guarantor loan or family pledge. These loans work by allowing a guarantor, normally a close family member, to contribute to your deposit by putting up some of the equity in their home.
While some lenders only require you to provide a deposit of 5% or 10% for a home loan, in order to avoid LMI buyers normally have to provide a deposit of 20%. For example, let’s say you plan on buying a home worth $600,000 and you’ve saved up $60,000, which is 10% of the home’s value. To avoid LMI, a guarantor could put up $60,000 worth of equity in their own home to cover another 10% for you!
A guarantor loan or family pledge can help buyers break into the market with that initial helping hand, and the buyer is then responsible for all the repayments. Buyers can also buy out their guarantors, so that they’re not responsible for the loan anymore.
While this loan can make buying your home more affordable, there can be significant disadvantages that you should keep in mind.
Eligibility Requirements and Considerations
The biggest concern with a guarantor and family pledge is that if you can’t meet your repayments, your guarantor will be held liable. As they put up equity in their home, they could face some big financial risks.
As we mentioned above, buyers may be able to buy out their guarantor, but some lenders may charge a fee for doing so. It is definitely worth buying out your guarantor and reducing their financial risk, but it’s good to be aware of some of the fees involved with this loan.
Something else to consider is that most lenders will only allow close family members to act as guarantors, such as parents or guardians, spouses and partners, or adult children. Some lenders may allow siblings, grandparents, or aunts and uncles to act as guarantors, but it would be very difficult to find a lender that would allow someone else to be your guarantor.
Mixing family and finances can be complicated, so many lenders either require or strongly recommend you seek financial or legal advice before proceeding with a loan.
Ready to Buy Your first home?
Phew, that was a lot to get through! We’re sure you have lots to think about before buying your first home, so we’ve got a few last-minute tips to share:
- Monitoring the property market can give you a better idea of how competitive the area you’re interested in is and can help you narrow down what your dream home might be. Similarly, keeping an eye on other factors such as the cash rate and interest rates can help you better plan your finances and figure out when the right time to buy may be.
- Doing more research into the schemes and grants mentioned will help you better narrow down which ones you may be eligible for, and doing this early ensures you’ll be good to go when you find your dream property.
- If you don’t already have one, creating a budget or savings plan can help you get a better idea of your finances and expenses. We’ve got a couple of calculators you can use to help you plan ahead, such as a borrowing power calculator, savings goal calculator, and a repayments calculator.
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