Buying or investing in a residential property is one of the most common ways Australians have built wealth over time. While it might seem overwhelming to make a start, there are several Government schemes and incentives available, which can be advantageous and help fast track your home buying journey.
For those looking to buy their own home in Victoria, we have prepared a list of Home Buyer Benefits available along with the summary of the eligibility criteria.
Victorians have access to these incentives and a some of these can also be availed together in combination, giving property buyers an incredible opportunity. These are active as of May 2022.
1 - FIRST HOME-OWNER GRANT (FHOG)
Benefit: $10,000 Grant for those who buy or build a new home.
Price Cap & Property Type: The contract price must be $750,000 or less. Newly built house, townhouse, apartment, unit or similar are entitled for the grant.
The First Home Buyer Grant in Victoria covers properties that “haven’t been previously sold as a place of residence, occupied as a home, or used for the provision of short -term accommodation, such as Airbnb.”
Eligibility Requirements: The grant is available for Australian citizens or permanent residents aged 18 or over who are willing to occupy the house as a Principal Place of residence for at least 12 months.
See full eligibility requirements: First Home-Owner Grant
2 – FIRST HOME BUYER STAMP DUTY BENEFITS
Benefit: For those who buy their first home on or after 1 July 2017, they may be eligible for an exemption or concession from the stamp duty. This can lead to savings of up to $31,070.
Price Cap & Property Type: First Home Buyers can benefit from Full Stamp Duty Exemption in Victoria on properties up to $600,000.
From $600,001 to $750,000, home buyers are entitled to Stamp Duty Concessions, see example below:
Unlike FHOG, VIC Stamp Duty benefits apply to existing homes, as well as vacant land.
See full Eligibility Requirements: First Home Buyer Stamp Duty - Eligibility
To calculate your land transfer duty: Stamp Duty Calculator Victoria
3 – NEW HOME GUARANTEE / FIRST HOME LOAN DEPOSIT SCHEME (FHLDS)
This is an Australian Government initiative to support eligible first home buyers purchase their first home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC).
The New Home Guarantee was extended with additional 10,000 places available from 1 July 2021 to 30 June 2022.
Benefit: Eligible first home buyers looking to build or purchase a new home are able to apply for a loan to purchase an eligible property through a participating lender, up until 30 June 2022.
Usually, first home buyers with less than a 20% deposit need to pay lenders mortgage insurance.
Under this Scheme, part of an eligible first home buyer’s home loan from a Participating Lender will be guaranteed by NHFIC. This is aimed at enabling you to purchase your first home sooner with as little as a 5% deposit.
Price Cap & Property Type: Eligible New Home Guarantee properties include newly constructed dwellings, off-the-plan dwellings, house and land packages, land and a separate contract to build a new home.
Maximum purchase prices (property price caps) are applicable for eligible properties purchased under the New Home Guarantee Scheme. A cap of $850k applies for properties in Victorian capital city & regional centre (Geelong), whereas for other Victorian regional areas the cap is limited to $550k.
Key dates: There are eligibility criteria based on the date of contract of sale and specific timelines for building off-the-plan properties or construction of a new dwelling.
Refer to Fact Sheet for further details.
Eligibility Requirements: Eligible for Australian citizens, 18 years or older. Single applicants with a taxable income up to $125k for previous FY, and couples with a taxable income of up to $200k.
This scheme is also limited to a restricted set of participating lenders.
See full Eligibility Requirements: New Home Guarantee
4 - FIRST HOME SUPER SAVER SCHEME (FHSS)
The first home super saver (FHSS) scheme allows you to save money for your first home inside your super fund. This will help first home buyers save faster with the concessional tax treatment of superannuation.
Benefit: Under the FHSSS, first home buyers, who have made voluntary super contributions of up to $15,000 per financial year into their super, can withdraw these amounts (plus associated earnings/less tax) from their super fund to help with a deposit on their first home.
The maximum amount of contribution that can be withdrawn under the scheme is broadly $30,000 for individuals, or $60,000 for couples.
Price Cap & Property Type: You must buy residential premises. This includes vacant land (if you’re planning to build), but not any premises that can’t be occupied as a residence, and not a houseboat or motor home.
Key dates: You’ll need to buy a home or land to build on within 12 months of withdrawal. You can ask the ATO to extend this to 24 months if required.
Eligibility Requirements: Must be 18 years old or older to request a FHSS determination or a release of amounts under the FHSS scheme. Also, you must have never owned property in Australia.
The first-home buyer must live at the property for at least six months in the first 12-month period from when it can be occupied.
See full eligibility requirements: First Home Super Saver Scheme
5 – FAMILY HOME GUARANTEE SCHEME
This scheme aims to support eligible single parents with at least one dependent child in purchasing a family home, regardless of whether that single parent is a first home buyer or a previous homeowner.
From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years to 30 June 2025.
The Family Home Guarantee is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.
Benefit: The Family Home Guarantee can be used to build a new home or purchase an existing home with a deposit of as little as 2 per cent,.
Price Cap & Property Type: Must be a residential property (consistent with the First Home Loan Deposit Scheme).
A cap of $700k applies for properties in Victorian capital city & regional centres, whereas for other Victorian regional areas the cap is limited to $500k.
Refer to Fact Sheet for further details.
Eligibility Requirements: Australian Citizens, 18 years or older. Must be a single parent with at least one dependent child. And taxable income that does not exceed $125,000.
See full eligibility requirements: Family Home Guarantee Scheme
6 – HELP TO BUY (PROPOSED SCHEME)
The labour government announced the Help to Buy scheme to help more people get into the housing market sooner by cutting the cost of buying a home by up to 40 per cent.
Help to Buy will be open to 10,000 Australians each financial year.
Benefit: Government co-buys up to 30% of an existing home and 40% of a new build.
Minimum deposit: 2% of the portion of the home you own.
Start date: January 1, 2023
Eligibility Requirements: Australian citizens of at least 18 years of age and who do not own any property. Maximum taxable income / year of $90k for singles, and $120k for couples.
See full Eligibility Requirements: Help To Buy
WHY NOW
Interest Rates are still at the lower end of what it has ever been in history, making home ownership a lot more affordable.
Australian Home Values Continue to Surge and have performed extremely well over the past few decades and especially over the last two years. With borders open again and influx of overseas professionals and migrants, the demand for housing is expected to continue to rise.
Rent Rises has been significant over the last few months and are expected to creep up, hence affecting the affordability. With rising rent, in many cases owning your own home could be a better and cheaper solution.
IN SUMMARY
Residential Property underpins Australia’s wealth, which is worth approx. 9.8 Trillion dollars. State and Federal Governments continue to provide help and support with several new measures and schemes to allow prospective buyers to start their journey earlier. The future of Australian property looks promising and will only get better since the international borders are now open.
TEAM SONI CAN HELP
At SONI, we simplify property purchase with our experience and knowledge. Whether you are looking to buy your First Home, your First Investment Property or to build on to your existing Portfolio. Our team of experts are here to help create a personalised property strategy based on your situation and aspirations.
Reach out to us today if you are looking for the right partner that is going to be there with you every step of the way.