First homebuyers on low and middle incomes could benefit from the newly introduced First Home Loan Deposit Scheme.
Introduced by the Federal Government, the scheme aims to to boost the housing market by helping eligible first homebuyers purchase a home sooner.
How? By allowing them to purchase a modest home with a deposit of as little as 5% of the property’s value. This is far easier to save up than the usual 20%.
The scheme will be made available to 10,000 people during the current financial year. Another 10,000 offers will be released in July.
Can the scheme be used in conjunction with other offers?
The scheme can be used in conjunction with other offers and stamp duty concessions made by each state. In WA, a First Home Owners Grant (FHOG) of up to $10,000 is available to eligible first homebuyers for the purchase or construction of a new home as long as it is to live in (not rent out). Those buying an established home as well as those buying land may be eligible for a stamp duty exemption or concession depending on the value of the property.
When does the First Home Loan Deposit Scheme start?
The scheme was launched on January 1. So far 3,000 potential first homebuyers have been registered by the two major banks on the panel under the scheme. The remaining 7,000 places for this financial year will be available from February 1.
What types of property can be purchased under the scheme?
- An established house, townhouse, villa or apartment/unit
- A new house and land package
- Land with a contract to build on it
- An off-the-plan purchase
Who is eligible to apply for the scheme?
- You must be over 18 and an Australian Citizen (permanent residents are ineligible)
- Singles with a taxable income of up to $125k per annum*
- Couples – defined as those in a married or de-facto relationship – with a taxable income of up to $200k per annum* (any other partnership arrangement, like friends or siblings buying together, are ineligible)
- You must have a deposit saved of at least 5% of the property’s value
- You must move in and live in the property as your principle place of residence
- It must be the first time you and any other party involved have purchased a property
* Incomes are assessed based on the last financial year
Is there a threshold?
Yes. IN WA the threshold (maximum purchase price under the scheme) is $400,000 in Perth and $300,000 elsewhere.
Click here for a list of frequently asked questions about the scheme.
How to apply
27 participating lenders have been selected to be on the panel. NAB and CBA offered guaranteed loans under the scheme from 1 January to the first 3,000 people. The remaining 25 non-major lenders will begin offering guaranteed loans under the scheme from 1 February. Click here for more information on how to apply including the full list of participating lenders.