First Home Buyers

First home buyers

For many people, buying their first home is guaranteed to be a reasonably stressful experience. Like most things you haven't done before, there is alot to learn and mistakes can be very costly, especially when it comes to purchasing such a significant asset as your First Home. The best strategy is to thoroughly do your research and to be prepared.

There are a whole range of activities that are associated with buying a house and getting a loan.  From researching loans, finding out how much you can borrow, getting home loan pre-approval, through lender fees and legal fees, stamp duty, building and pest inspections. There are many great free resources and information available to First Home Buyers to assist them with the buying process. You can find help on what to expect on how to manage your way through what you need to do on this site.

First Home Buyers Deposit Saver Scheme

The federal government offers a deposit saving scheme for first home buyers called First Home Saver Accounts. It is designed to assist Australians aged 18 and over to save for their first home.
First Home Saver Accounts are designed to provide a simple, tax effective way for Australians to save a deposit for their first home through a combination of a Government contribution and low taxes.
In summary, here is how it works.  The Government will pay a contribution on up to $5,000 (indexed) of individual contributions made each year, and individuals can contribute a maximum of $10,000 each year (indexed).  Investment earnings (or interest) that accrues in the accounts will be taxed at 15 per cent. Withdrawals will be tax free where they are used to purchase a first home to live in.

(Federal) First Home Buyer's Grant Overview

Through the state governments, the Federal Government has a grant available to first-home buyers of $7000 to go towards the purchase of their first property.  In short, to qualify for grant:

  • Your application must be made within 12 months of completion of construction or settlement of the home

  • You or a joint applicant must be an Australian Citizen or permanent resident. Requirements vary among states and territories regarding the number of applicants who must be an Australian citizen or permanent resident and age of the applicant

  • You must be buying or building your first property as a person, not as a company or trust

  • You or your spouse must not have previously owned an interest in land in Australia that had a residence on it prior to July 1, 2000

  • You or your spouse must not have owned and occupied a home after July 1, 2000

  • If you have purchased investment property(ies) after 1 July 2000 as long as you have never owned property before 1 July 2000 and have never lived in the investment property(ies), you should eligible.

  • Neither you nor your spouse must have claimed this grant previously

  • Entering into a building, in the case of owner-builders, must have occurred on or after July 1, 2000

  • An eligible home must be located in Australia and be a new or established house, home unit, flat or other type of self-contained fixed dwelling that lawfully can be used as a place of residence

  • An eligible home must be occupied by you as your principal place of residence within 12 months of construction of the home. There are minimum periods of occupancy required by each state or territory

  • Joint applicants are restricted to a single application for a single property and only one payment of $7000 is made

NSW First Home Buyer's additional incentives

In addition to the federal government grant, each state offers different additional support to first home buyers.  The New South Wales government offers:

First Home Plus

The first home plus scheme provides eligible purchasers with exemptions on transfer duty and mortgage duty on homes valued up to $500 000 and concessions on duty for homes valued between $500 000 and $600 000.

Eligible purchases buying a vacant block of residential land valued up to build their home on will pay no duty on vacant land valued up to $300 000, and will receive concessions on duty for vacant land valued between $300 000 and $450 000.

To qualify for First Home Plus you must meet the criteria listed below:

  • The contract and the transfer must be for the purchase of the whole of the property.

  • All purchasers must be 'eligible purchasers'.

  • At least one eligible purchaser must occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of completion of the agreement.

  •  An 'eligible purchaser' is a natural person (ie not a company or trust) at least 18 years of age who has not, and whose spouse/de facto has not:

  • At any time owned (either solely or with some one else) residential property in Australia other than property owned solely as trustee or executor.

  • Previously received an exemption or concession under First Home Plus

Note: If all purchasers are not 'eligible purchasers' you may still qualify for a concession under First Home Plus One.

First Home Plus One

From 1 May 2007, First Home Plus One allows eligible purchasers to buy property with other parties and still receive a concession. To qualify the eligible purchasers must buy at least 50 per cent of the property. The value limits and purchasers eligibility criteria of First Home Plus apply. Transfer duty is calculated with reference to the proportion of the property purchased by other parties. However, this interest is disregarded if it is not more than five per cent.
Full mortgage duty concessions and exemptions apply to mortgages given to assist the purchase of property under First Home Plus One.
You can calculate the exact amount of your concession using the First Home Plus calculator.

Note: if the first home buyer's spouse has previously owned a home or received a benefit under First Home Plus, the first home buyer will not be entitled to First Home Plus One, regardless of whether or not the spouse is also a purchaser.

For further First Home buyer information, contact a Finance Today Adviser for a no obligation chat about your home loan needs or visit the links below.


More information for First Home Buyers:

How to win at property auctions
Buying a house exchange and completion
Negotiating with real estate agents
Process of buying a first home
What to look for
Getting started

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