Maximizing Government Grants for First-Time Home Buyers

For first-time home buyers in New South Wales (NSW), Australia, 2024 presents a unique opportunity to leverage various government grants aimed at making homeownership more accessible.  

Navigating through the intricacies of these grants can significantly impact the financial landscape of your home buying journey. In this guide, we'll explore the key government grants available and how you can make the most of them. 

NSW Stamp Duty Waiver 

The stamp duty has been waived for property purchases up to $800,000 and discounted for those up to $1,000,000. For purchases above $1,000,000, normal stamp duty rates will apply. 

Eligibility Criteria 

To be eligible for the exemption scheme, the following criteria must be met: 

• The contract date must be on or after 1 July 2023 and must be for the full property. 

• The applicant must be an individual (not a company or trust*). 

• The applicant must be over 18 years old. 

• The applicant and their spouse or partner must not have owned or co-owned residential property in Australia before. 

• Neither the applicant nor their spouse or partner must have received any exemption or concession under this scheme. 

• At least one of the first home buyers must be an Australian citizen or permanent resident. 

Regional First Home Buyer Guarantee 

If you're a first-time homebuyer, you may be eligible to take advantage of the RFHBG. This scheme allows you to purchase a home with a deposit as low as 5%, and you won't have to pay lenders mortgage insurance (LMI).  

The Government can guarantee up to 15% of your home loan under the RFHBG, which means that participating lenders won't require you to pay the LMI. Typically, lenders would require you to pay LMI when your deposit is below 20% of the property's purchase price. 

Eligibility  

To qualify for the Regional First Home Buyer Guarantee, you must satisfy the following criteria: 

• Be a citizen of Australia or a Permanent Resident, aged 18 years or older 

• Reside in a regional area or an adjacent regional area for the preceding 12 months to the date of signing the home loan agreement 

• Apply as a single or joint applicant 

• Have a total income of $125,000 or less for singles or $200,000 or less for couples in the previous financial year, as indicated on the Notice of Assessment from the ATO 

• Be a first home buyer or have not owned a property in the previous 10 years (owner-occupied or investment) 

• Contribute at least a 5% deposit towards the property purchase 

• Purchase a property in your current or adjacent regional area 

Family Home Guarantee 

If you're a single parent or legal guardian searching for a family home, the Australian Government's Family Home Guarantee scheme might be able to help you. With as little as a 2% deposit, you can use the Family Home Guarantee to purchase an existing home or construct a new one.  

This program is open to both first home buyers and previous homeowners. It's important to note, though, that the Family Home Guarantee cannot be used to purchase an investment property. 

Eligibility  

To be qualified for the Family Home Guarantee, you must meet the following requirements: 

• You must be an Australian citizen or a permanent resident aged 18 years or above. 

• You must be a single parent or a legal guardian with at least one dependent living with you. 

• You must have earned $125,000 or less in the previous financial year. 

First Home Buyer Guarantee 

If you're a first-time homebuyer, you might be eligible for the First Home Guarantee. With this incentive, you can buy your first home with a deposit as low as 5% without worrying about Lenders’ Mortgage Insurance (LMI).  

LMI is an insurance payment that protects the lender if you fail to make your home loan repayments. Typically, it's required when borrowing more than 80% of the property's value. However, with the First Home Guarantee, the Government will act as guarantor and underwrite your home loan, ensuring that you don't have to pay LMI. 

Eligibility 

To qualify for the First Home Guarantee scheme, you must meet the following criteria: 

Income Test: 

• For the previous financial year, singles must have a taxable income of less than $125,000, and couples must have a taxable income of less than $200,000. It is important to note that you will need to provide the relevant Notice of Assessment from the ATO when applying for the scheme. 

Joint Applications: 

• Prior to July 1, 2023, only married or de facto couples were allowed to apply together. However, from July 1, 2023, any two eligible individuals can apply together, including friends, siblings or other family members. 

Prior Ownership: 

• You must provide evidence that you have not owned or had an interest in property in Australia in the past ten years. This includes commercial property, investment or company title properties. 

Citizenship: 

• Prior to July 1, 2023, you must be an Australian citizen and over 18 years old. However, from July 1, 2023, eligible borrowers who are Australian Permanent Residents will also be able to apply for the scheme. 

Owner Occupied: 

• You must move into the property within six months of purchasing it and continue to live in it for as long as your home loan has a guarantee under the scheme. 

First Home Owners Grant for Building or Buying Brand New 

The First Home Owner Grant (FHOG) offers a $10,000 incentive for those purchasing or building their first new home. Eligible properties include houses, townhouses, apartments, units, or similar structures that are newly built, purchased off the plan, or have undergone substantial renovations. If the property is a newly built house, townhouse, apartment, or unit, it must not exceed $600,000 in purchase price. 

However, if you purchase vacant land and sign a building contract with a builder, the value of the vacant land plus the value of the comprehensive home building contract and the cost of any building variations done together must not exceed $750,000. If the property is a substantially renovated home sold by the seller, the purchase price must not exceed $600,000. 

Eligibility 

If you meet the following requirements, you may qualify for the grant: 

• The majority of the house has been removed or replaced. 

• The property has not been occupied by the seller, builder, or tenant before, during or after renovations. 

• If it is the first time the home has been sold since the renovation project was completed. 

Keep in mind, if the person who constructed the home lived in it, leased it out, or used it for short-term accommodation, the first sale of the property will not be considered a new home. 

Tips for First-time Home Buyer

In 2024, first-time home buyers in NSW have an array of government grants at their disposal. Navigating these opportunities requires a strategic approach, understanding eligibility criteria, and staying informed about the changing landscape of government initiatives.  

By leveraging grants such as the NSW Stamp Duty Waiver, Regional First Home Buyer Guarantee, Family Home Guarantee, First Home Buyer Guarantee, and FHOG, you can significantly enhance your ability to step onto the property ladder. Remember to a qualified mortgage brokers to tailor these grants to your unique situation and pave the way for a successful homeownership journey in 2024. 

In real-time, the info we provide is accurate, but it's wise to consult your mortgage broker regularly, as grant details may change.