Cash is almost always a consideration when buying your own home for the first time. To help first-time buyers purchase a property, the Queensland government offers a First Home Owners’ Grant in some circumstances: with a current value of $15,000, the grant is available when purchasing a new-build property, or on the cost of building a new home.
In addition, in 2020 the federal government introduced a scheme called the “First Home Loan Deposit Scheme”, designed for those looking to enter the property market with a smaller deposit than usually required.
If you’re about to take the plunge into the property market, read on to discover if you’re eligible for these two schemes.
If you are a first-time home buyer purchasing a new-build property (i.e. one that hasn’t been purchased or lived in before) or building your own property, you may be eligible for a one-off grant of $15,000 from the Queensland government.
As of 2020, the current value of the First Home Owners’ Grant for Queensland properties is $15,000.
Although this is a drop compared with previous years (when grants of up to $20,000 were available for first-time buyers investing in new properties), $15,000 still compares favourably with what’s offered in other parts of the country.
Additionally, if you build in regional Queensland, there is a further $5,000 available as part of the state government’s COVID-19 relief measures. Combined with the federal government’s $25,000 HomeBuilder grant program, first home buyers in Queensland may be eligible for up to $45,000 in government assistance.
In order to be eligible for a first home grant, you need to fulfil the following criteria:
There are some other exceptions, as well as a list of criteria relating to special circumstances when a grant may not be awarded. Further information about these specifics can be found here.
If you satisfy these criteria, the next step is to fill in the first home buyers grant application form in order to start the process for consideration and approval.
In the first instance, you will need to fill in the first home owner’s grant application form and submit it.
Yes! Government grants for first time home buyers are still available in Queensland. For 2020, the grant has been set as a one-off payment of $15000. The grant is only on offer to first time home buyers and is only available for the purchase of new-build properties or for people who are building their own property (or contracting with a builder to do it on their behalf).
At the time of writing, there are no plans by the Queensland government to end the first-time home buyer grants. Although grants were higher in previous years, the current $15,000 first home grant is still available for first-time purchasers buying new-build properties or building a property.
For first-time buyers who are looking to buy a pre-existing home (one that’s been occupied before or which isn’t a new-build), the first home buyers grant Qld stamp duty relief applies. This enables first-time buyers to enjoy relief of up to $8,750 on their stamp duty provided the cost of the property is below $500,000. First-time homeowners who are choosing to build their own property can take advantage of both stamp duty relief up to $7,150 on their land purchase (provided the value of the land is less than $250,000 and the first-time buyers home grant).
The first home buyers grant money can be used for a deposit. That said, because the grant is not normally handed across until the transaction is complete, you may well need to find the money up-front to cover the deposit in order to satisfy the requirements of your lending agent. Different home loan providers have different criteria: some may accept proof of your eligibility for a grant as sufficient guarantee that you will be able to pay the deposit, others may not.
No. Although people looking to build their own property on land can get stamp duty relief (up to a maximum of $47,175 on land which costs less than $250,000.
Marriage in itself is not a barrier to the First Home Owners’ Grant application being successful. That said, if your spouse does not meet the criteria for the grant, then it may not be awarded.
Yes! Provided permanent Australian residents satisfy all the other criteria for the First Home Owners’ Grant, then they should be eligible to apply. Note that temporary visas or similar mean that you would be ineligible for a Queensland First Home Owners’ Grant.
No. The First Home Owners’ Grant is only available once. This affects both single and joint applications. Even if you no longer live or have an interest in the property purchased using the home owners grant, you are still ineligible to apply for another one. Similarly, if you used a home owners grant to build your own home, you then can’t claim a further grant should you sell the home you built and attempt to purchase another one.
First home buyers can enjoy stamp duty relief whether they are eligible for a first home buyers grant or not. Stamp duty relief for first-time buyers applies to both new-build home purchases and existing buildings. Stamp duty relief is also available on land purchases, where the land is being used to build a new-build property.
Total stamp duty relief is only available on first-time purchases if the value of the purchase is below $500,000. Properties which cost more than this will incur further stamp duty, irrespective of whether they are a first purchase or not. When it comes to land, the land must be worth less than $250,000 for full stamp duty relief to apply. Above that amount and the rebate will not cover the full cost of the stamp duty which needs to be paid.
Generally, the answer to this question is no. The vast majority of First Home Owners’ Grants are given out to people who are buying a new-build property for the first time or who are building their own property for the first time. In some circumstances, a grant can be awarded on an existing home, where extensive refurbishment or remodelling has taken place to make the dwelling fit for habitation. These are judged on a case by case basis.
The new home owners grant is paid across at different points in the purchasing transaction, depending on whether your new home owners grant is for a new-build constructed by a developer or whether you are building your own property (or having it built for you by a builder as a one-off project).
For a first time new-build purchase from a developer, the grant is paid on completion of the sale.
If you are building your own property, the government grant for first home buyers is paid across once construction has actually begun on site.
The 2020 First Home Loan Deposit Scheme commenced on January 1, 2020.
The scheme encourages first home buyers with just a 5% deposit to take out a mortgage where they can avoid paying lenders mortgage insurance (LMI) fees. Where banks and lenders usually require purchasers to have 20% of the property’s value saved already to be exempt from LMI fees, the government will underwrite the loan as part of the scheme so that LMI no longer applies.
The scheme means that the federal government acts as your guarantor, making it far easier to be approved for a home loan without having saved as much money. The lender, however, will still do their normal checks on your financial situation.
In Queensland the cap for capital cities and regional centres (Gold Coast and Sunshine Coast) is $475,000, with the rest of the state being limited to $400,000. Read more about this national scheme here.
The information contained in this article is not legal or financial advice and should not be relied upon as a substitute for professional advice. Consumers should make their own independent inquiries and consider the need to obtain any professional advice relevant to their circumstances. Further information is available at http://www.firsthome.gov.au/ and https://www.nhfic.gov.au/what-we-do/fhlds.