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Commonwealth and state/territory support for home buyers takes a number of different forms; however, government support has long term public benefits when it focusses on increasing the number of dwellings in the community.

Federal Election 2022

As part of its 2022 Federal Election campaign, the Australian Labor Party (ALP) has promised the ‘Help to Buy’ shared equity scheme for 10,000 households each year (who don’t appear to have to be first home buyers but can’t currently own a property). The Federal Government will be able to contribute a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home. The ALP has also announced a Regional First Home Buyer Support Scheme to help 10,000 first home buyers a year in regional Australia to buy a home with a 5 per cent deposit.

Existing First home buyer programs

Commonwealth Government loan guarantee

The Commonwealth Government’s Home Guarantee Scheme, (announced in the 2022 Budget) supports eligible homebuyers to purchase a home with a low 5 per cent deposit, provides 50,000 guarantees per year for 3 years from 2022–23. The Scheme will then drop down to 35,000 guarantees a year after that.

The allocation will be:

  • 35,000 guarantees per year ongoing for the First Home Guarantee (formerly the First Home Loan Deposit Scheme)
  • 5,000 places per year to 30 June 2025 for the Family Home Guarantee (for eligible single parents with at least one dependent child in purchasing a family home)
  • 10,000 places per year to 30 June 2025 for a new Regional Home Guarantee that supports eligible people to purchase a new home in a regional location.

Through the Scheme the Government is targeting people who haven’t been able save enough of a deposit to get a loan from a bank or other lender to buy a home. Using the Scheme, first home buyers can buy a home with a 5 per cent deposit rather than the 20 per cent deposit usually required by banks.

The Commonwealth Government, through the National Housing Finance and Investment Corporation (NHFIC), effectively guarantees to the lender up to 15 per cent of the home’s value. The intention is that first home buyers can purchase a home sooner as they need a much smaller loan deposit than would otherwise be the case, however the home buyers must be able to afford the ongoing loan repayments.

In a similar vein, the Family Home Guarantee is designed to help eligible single parents with children buy a home with a deposit of 2 per cent. Once again, the home buyer will have to show that they are able to repay the loan to their bank or other lender.

Commonwealth Government HomeBuilder grant

HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant to build a new home, substantially renovate an existing home or buy an off the plan home/new home.

HomeBuilder provides a $15,000 grant for eligible contracts entered into on or after 1 January 2021 until 31 March 2021 (inclusive). (A $25,000 grant was available for eligible contracts entered into on or after 4 June 2020 up to and including 31 December 2020.)

First Home Owners Grant (FHOG)

Various states and territories across Australia have differing versions of first home owner grants.

  • Victoria

    A $10,000 First Home Owner Grant (FHOG) is available for households when they buy or build their first home for contracts signed from 1 July 2017 to 30 June 2021 ($20,000 is available for new homes built in regional Victoria). The home must be new, that is it can’t have been previously sold or used as a place of residence, and must be valued at $750,000 or less.

    In addition, first home buyers may be eligible for stamp duty exemption or reduction (including the 50% duty waiver) when they purchase a new or established property in Victoria with a dutiable value up to $600,000. The duty concession applies where the dutiable value is more than $600,000 but not more than $750,000.

  • ACT

    The Home Buyer Concession Scheme provides a full stamp duty concession for eligible lower income applicants. The total gross income of all buyers, including their partners (if any), must not be greater than the specified income threshold.

  • NSW

    The First Home Buyer Assistance Scheme (FHBAS) entitles an eligible first home buyer to a concessional rate of stamp duty or even an exemption from paying it altogether.

    First home buyers can pay no stamp duty on a new home valued at less than $800,000 or on an existing home valued at less than $650,000. A concessional transfer duty rate is available for first home buyers buying a new home valued between $800,000 and $1 million or an existing home valued between $650,000 and $800,000.

    The First Home Owner (New Homes) Grant of $10,000 is available to households that buy a newly built or substantially renovated home.

  • Northern Territory

    Householders buying or building a new home can apply for a First Home Owner Grant (FHOG) of $10,000.

    The Home Buyer Initiative makes it possible for low to middle income earners (including first home buyers) to buy a new residential property, or to build on vacant residential land. To be eligible, household income must be less than a specified threshold.

    HomeBuild Access gives householders an opportunity to access low deposit home loan options for new-built homes or to buy vacant land and build their own home. The Territory Government can provide loans of up to 17.5 per cent of the purchase price of the new home. Householders will be required to obtain finance for 80 per cent of the purchase price through an approved financier, currently People's Choice Credit Union (People's Choice).

    While there are no income or asset limits for applicants, purchase price limits for properties obtained using HomeBuild Access apply: for properties with up to two bedrooms the maximum purchase price is $475,000, and for properties with three or more bedrooms the maximum purchase price is $550,000.

  • Queensland

    The Queensland First Home Owners’ Grant can contribute $15,000 towards buying or building a new house, unit or townhouse (valued at less than $750,000). A new home is a brand new dwelling that has not been previously occupied as a place of residence or sold as a place of residence, or an established home that has undergone substantial renovations.

  • South Australia

    First home buyers may be eligible for the first home owner grant of up to $15,000 if they are buying or building a new home (a home that has not been previously occupied or sold as a place of residence, including a substantially renovated home) in South Australia; and the market value of the property is $575,000 or less. (The first home owner grant ceased for established homes on 1 July 2014.)

  • Tasmania

    A $20 000 first home owner grant is available to eligible applicants who purchase or build a new home in Tasmania between 1 July 2016 and 30 June 2022 (inclusive).  A new home is a home that has not previously been occupied or sold as a place of residence.

    For first home buyers of established homes, which have a dutiable value of $400 000 or less, a 50 per cent discount on property stamp duty is available.

  • Western Australia

    First home owner grant (FHOG) gives eligible first home buyers $10,000 towards the cost of buying or building a new dwelling. The grant is not available for the purchase of an established home or for renovations to an existing home.

    First home buyers may also be eligible for a reduction in the amount of stamp duty they must pay on the purchase of a new or existing home.

Shared Equity schemes

Shared equity schemes allow lower income home buyers to share the capital cost of purchasing a home with a state or territory government equity partner. Such schemes allow lower income homebuyers to buy sooner as they need a lower initial deposit and have lower ongoing housing costs.

  • HomesVic Shared Equity Initiative

    HomesVic applications opened in February 2018. The scheme is available to up to 400 households. Approximately 250 homes have now been purchased and others are progressing to realise their dream of home ownership.

    Households must have a deposit of at least 5 per cent and earn no more than $84,555 for sole person households per year, or $107,105 for multiple person households.

  • South Australia

    The Affordable Homes Program, managed by Renewal SA, promotes shared equity assistance initiatives on behalf of SAHT. Eligible buyers enter into an agreement with the SA Housing Authority who will cover a percentage (up to 35%) of the initial investment into an Assist home, payable back following refinancing or sale– whichever comes first.

  • Western Australia

    Western Australia's Housing Authority will fund up to a maximum of 30% of the purchase of the home for eligible homebuyers.

  • ACT Shared Equity Scheme

    The scheme provides eligible tenants to purchase 70% of their Housing ACT property upfront, with IMB ltd. providing the finance. The remaining 30% equity of the property remains with Housing ACT. The purchaser agrees to progressively purchase this equity from Housing ACT over a maximum 15 year period.

  • QLD Pathways Shared Equity Loan

    Tenants in government-owned housing may use this loan to enter into a partnership with the state government to buy a share of their home. The home must be the one they’re currently renting and be available for purchase. The loan repayments are no more than 35% of tenant’s income home buyers are obliged to buy at least 60% of the property.

  • Tasmania

    No government managed shared equity schemes were identified for NSW or Northern Territory.

AHURI Inquiry to further examine first home ownership

To further explore the topic of how governments can best support home buyers, AHURI is currently funding the ‘Inquiry into financing first home ownership: opportunities and challenges’.

The Inquiry will investigate the economic, social, demographic and policy developments that have impacted on transitions into home ownership by Australians over time. The research will consider how financing home ownership has evolved and the implications of alternative policy options for the housing careers of Australians.

This brief was first published on 13 July 2021.