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First Home Buyers - Navigating Government Grants & Concessions


The year 2020, a pandemic is declared, so many households and businesses impacted. To help our economic recovery, the Government announces relief packages, grants/concessions & other incentives to many industries. For prospective home buyers and builders, it came as big news!


The Home Builder Grant was announced and everyone rushed to buy land and build. But for those uninterested in building, what’s in it for them?


For First Home Buyers, we’ve seen a lack of ‘grants’ for established homes and a continuation or addition of concessions such as Stamp Duty discounts or exemptions (depending which State you’re in) and the Federal Governments ‘First Home Loan Deposit Scheme’ (FHLDS) – more information can be found via the link at the end of this article. For first home buyers looking at new (never lived in) properties including off-the-plan and also first home builders, there has been a large amount of incentive.


For us Tasmanians, First Home Buyers for Established Property of up to $500,000 can take advantage of a 50% Stamp Duty Concession, for a property worth $500,000 that is a saving of over $9,000. The price cap was increased from $400,000 to remain in line with property values. For those that are also eligible and able to secure a place on the First Home Loan Deposit Scheme, there is an opportunity to avoid Lenders Mortgage Insurance (LMI) – an insurance the borrower pays for as a one-off lump sum when the loan is taken out and covers the Lender not the borrower – a requirement for Home Loans that exceed 80% of the property value in which they're secured against. This insurance premium can cost upwards of 2%-3% of the loan amount. If you were to take out the maximum loan for a $500,000 property purchase, the saving of 50% Stamp Duty as aforementioned combined with not paying Lenders Mortgage Insurance could be upwards of $20,000 which you, the borrower would have been required to save (or have those funds available i.e. gift from parents) to get your loan approved without conditions – this is in addition to the 5% deposit plus other costs required. For a first home buyer, currently renting at the same time saving for a house deposit, the potential saving of up to $20,000 should be music to your ears. Imagine, thinking you’re still $20,000 short from your savings goal but then being told you have enough savings NOW to buy your house?!


For us Tasmanian First Home Buyers purchasing brand new (never lived in) property or building their home – including off-the-plan purchases – you could be eligible for the First Home Owners Grant of $30,000 that has come into effect 1st of July 2021 and back dated to 1st of April 2021. This is an increase from $20,000. Unfortunately you won’t be eligible for the Stamp Duty Concession in addition to the grant however a whopping $30,000 that can be used as part of your contribution is more than generous. Unfortunately this doesn’t form part of ‘Genuine Savings’ – this being a 5% deposit saved over a minimum period of 3 months which most Lenders require. Another benefit is the First Home Loan Deposit New Home Scheme, this is very similar to the First Home Loan Deposit Scheme for established property and works in the same way, further information can be found via the link at the end of this article.


Single parents now have an assistance package also as part of the First Home Loan Deposit Scheme. This allows eligible single parents to enter the housing market with only a 2% deposit of genuine savings rather 5% however, be mindful there will still be costs associated such as the stamp duty, conveyancing/legal etc. More information about deposits and contributions can be found in our previous article, ‘How Much Do I Really Need For My House Deposit?’.


For more info about the First Home Loan Deposit Schemes visit:

https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home


For more info about the First Home Owners Grants & Concessions visit:

https://www.sro.tas.gov.au/