Government grants & schemes: Unlocking your eligibility
You may have heard about the various ways the Government can assist first-time home buyers in entering the property market.
At times, it can be challenging to determine the best option for you or your children. Lucky for you, we’ve simplified the most popular schemes, making it easier to understand what is available.
It may seem like a lot to take in, and indeed it is. If you find yourself feeling overwhelmed, don’t hesitate to give us a call. At Proactive Finance Group, we’re always here for a friendly chat!
So, let’s break it down:
First Home Owner Grant (FHOG)
In recent years, this benefit has been scaled back; however, if you are purchasing a new home or building one, you may still be eligible. Each state has distinct requirements, but in Victoria the First FHOG amounts to $10,000.
In most cases, we can incorporate this grant into your contributions, and the bank will apply for it on your behalf.
To verify your eligibility, you can visit this link: www.sro.vic.gov.au/content/will-i-be-eligible-first-home-owner-grant
First Home Owner Duty Exemption or Concession
When you purchase your first home, you may qualify for a duty exemption or concession.
As a first home buyer in Victoria, you are eligible for a stamp duty exemption if the purchase price is $600,000 or less. If the purchase price falls between $600,000 and $750,000, you may be eligible for a stamp duty concession.
For more information, check out: www.sro.vic.gov.au/first-home-owner/apply-first-home-buyer-duty-reduction
Home Guarantee Scheme (HGS)
This scheme encompasses three types of Guarantees:
- First Home Guarantee (FHBG)
- Regional First Home Buyer Guarantee (RFHBG)
- Family Home Guarantee (FHG)
These schemes offer you the opportunity to purchase a home with as little as a 5% deposit or, in some cases, 2% (details below). Essentially, the government secures your loan, similar to a family guarantor, allowing you to bypass Lenders Mortgage Insurance (LMI) and, in most cases, obtain a lower interest rate.
There have been some recent changes to these schemes, including some exciting updates. Now, they are open to both Australian Citizens and Permanent Residents of Australia. Additionally, you can purchase a property with your de-facto partner, sibling, family member, or friend. Furthermore, these schemes were originally designed for first home buyers but are now available to individuals who haven’t owned a property in the last 10 years.
Here’s a breakdown of the schemes:
First Home Guarantee (FHBG):
The same as above, from 1 July 2023 to 30 June 2024, there are 35,000 FHBG places available.
Regional First Home Buyer Guarantee (RFHBG):
This is similar to the FHBG but is specifically aimed at supporting eligible regional home buyers looking to purchase in regional areas. For the financial year 2023-24, there are 10,000 places available.
Family Home Guarantee (FHG):
This scheme supports eligible single parents and eligible single legal guardians with at least one dependent, helping them buy a home sooner with a deposit as little as 2%. For the financial year 2023-24, there are 5,000 places available.
For more detailed information on these schemes, please visit: NHIFC Support to Buy a Home
To check your eligibility, you can click here: Eligibility Tool
Victorian Homebuyer Fund
The Victorian Homebuyer Fund is a shared equity scheme designed to facilitate home ownership for Victorians.
If you have a 5% deposit, the Victorian Government may contribute up to 25% of the purchase price in exchange for an equivalent share in the property. This arrangement can potentially save you money by reducing your loan amount and eliminating the need for LMI.
Participants are required to repurchase the Government’s share in their property over time through methods such as:
- refinancing
- utilising savings, or;
- upon the sale of the property.
It’s important to note that the Victorian Government does not charge interest on its investment in participants’ homes but shares in any capital gains or losses proportionate to its share in the property.
For additional information and to check your eligibility, please visit: Victorian Homebuyer Fund
First Home Super Saver Scheme
The First Home Super Saver (FHSS) scheme provides an opportunity for individuals to save money for their first home within their superannuation (super) fund. This scheme allows you to make voluntary contributions, which can be either before-tax concessional or after-tax non-concessional contributions, into your super fund to save for your initial home purchase. If you meet the eligibility criteria, you can request the release of these voluntary contributions, along with their associated earnings, to assist you in acquiring your first home.
Under the FHSS scheme, you have the option to apply for the release of a maximum of $15,000 from your voluntary contributions made in a single financial year. This amount can be included in your eligible contributions for release, up to a cumulative total of $50,000 in contributions across all years.
Please note if you previously requested a release before 1 July 2022, when the total limit across all years was $30,000, you cannot make any further requests to reach the current $50,000 limit.
It’s important to understand that the associated earnings you receive are calculated based on the shortfall interest charge (SIC) rate and represent a deemed amount of earnings. These earnings do not reflect the actual returns on the contributions within your super fund.
The contributions released through the FHSS scheme can be utilised for the purchase of either a new or existing home in Australia. This scheme aims to facilitate your journey toward home ownership by providing a tax-efficient way to save for your first property.
Get in touch
As you can see, there are a number of ways to help you get into the property market. We are here to help you find the best lender, or put the steps in place to begin saving for that deposit. Reach out to our mortgage brokers on 03 4418 3444 or schedule and appointment with us!
Proactive Finance Group, your trusted mortgage broker in Bendigo.
