First Home Buyer Upfront Costs 2026-27: Deposit, Duty, LMI and Grants in One Number
A first-home buyer’s upfront cash requirement in 2026-27 is not a single number — it is the sum of a loan deposit, transfer duty after state-specific first-home concessions, lenders mortgage insurance where the loan-to-value ratio exceeds the lender’s threshold, and any grant that reduces the cash you must bring to settlement. In Queensland, a buyer of a new home below $750,000 can eliminate duty entirely (no price cap for new builds) and receive a $30,000 First Home Owner Grant, potentially shrinking the upfront cash to little more than a 5% deposit on a $600,000 purchase — roughly $30,000 plus fees — because the grant can cover most of the deposit gap. In Victoria, the same purchase price attracts $2,870 plus 6% on the excess over $130,000 under the general scale, but a first-home buyer using the $600,000 full-exemption threshold can wipe duty to zero and claim $10,000 FHOG, keeping the cash requirement close to the deposit alone. The cascade matters: every dollar of duty saved or grant received directly lowers the LVR, which can pull the loan below the 80% LMI trigger point and avoid a four-figure premium being capitalised onto the loan.
What makes up “upfront costs” for a first-home buyer in 2026-27?
Upfront costs are the cash a buyer must have available on or before settlement day. For a first-home buyer using a mortgage, the core components are the deposit (the difference between the purchase price and the loan amount), transfer duty (stamp duty) after any first-home exemption or concession, lenders mortgage insurance if the LVR exceeds the lender’s threshold — typically 80% — and settlement fees such as conveyancing, title registration and loan establishment charges. The deposit is not a fixed percentage; it is whatever the lender requires after applying the APRA serviceability buffer of 3 percentage points above the product rate and, from February 2026, the debt-to-income cap that limits new lending at a DTI of 6 or above to 20% of each portfolio. A first-home buyer who qualifies for a full duty exemption and a cash grant may find that the grant effectively funds part of the deposit, reducing the cash they must save independently.
How does transfer duty work for first-home buyers in each state?
Transfer duty is the largest variable in the upfront-cost equation. Each state and territory applies its own duty scales, first-home concessions and grant programs, and the differences can shift the cash requirement by tens of thousands of dollars on the same purchase price. The Stamp Duty by State 2026-27: Same Purchase Price, Very Different Settlement Cheque comparison shows how a $700,000 home can attract zero duty in one jurisdiction and more than $25,000 in another, depending on concessions.
New South Wales
Under the First Home Buyers Assistance Scheme, a new or existing home priced at $800,000 or below is fully exempt from transfer duty in 2026-27; between $800,000 and $1,000,000 the exemption phases out on a sliding scale. Vacant land up to $350,000 is also fully exempt. The First Home Owner Grant of $10,000 applies to new homes priced at $600,000 or below. A buyer purchasing a $750,000 established home in Sydney pays zero duty and receives no FHOG, so their upfront cash is essentially the deposit plus conveyancing and loan fees. A buyer stretching to a $950,000 home loses the full exemption and pays a partial duty amount that falls between the $11,602 base and the 4.5% marginal rate on the portion above $387,000, which can add more than $20,000 to the settlement cheque.
Victoria
Victoria exempts first-home buyers from duty on purchases up to $600,000, with a concessional scale phasing out the benefit between $600,001 and $750,000. The exemption applies to both new and existing homes. The FHOG of $10,000 is available for new homes up to $750,000. A first-home buyer in Melbourne buying an established apartment at $580,000 pays no duty and receives no FHOG, keeping the cash requirement lean. At $680,000, the buyer receives a partial duty concession — the general scale would apply $2,870 plus 6% on the amount above $130,000, but the concession reduces the effective duty, leaving the buyer with a smaller but still material duty bill that must be funded in cash.
Queensland
Queensland’s first-home concessions changed materially from 1 May 2025. A buyer of a new home or vacant land to build on pays no transfer duty with no price cap. An existing-home concession provides full exemption up to $700,000 and a partial concession between $700,000 and $800,000. The FHOG is $30,000 for new homes under $750,000. A Brisbane first-home buyer purchasing a new house-and-land package at $720,000 pays zero duty and receives $30,000 in FHOG, which can be directed toward the deposit or settlement costs. On an established home at $650,000, duty is fully exempt but no FHOG is payable, so the cash requirement is the deposit plus fees.
Western Australia
Western Australia’s first-home duty exemption, effective from 21 March 2025, covers homes up to $500,000 fully, phasing to $700,000 in the metropolitan and Peel regions or $750,000 in regional areas. Vacant land up to $350,000 is fully exempt, phasing to $450,000. The FHOG is $10,000. A Perth buyer at $480,000 pays no duty and may receive the FHOG if the property is new, keeping the upfront cash close to a 5% deposit. At $650,000 the buyer receives a partial concession that reduces but does not eliminate duty, and the FHOG may still apply for a new build.
South Australia
South Australia’s first-home relief, effective from 13 February 2025, provides full transfer duty exemption for new homes, off-the-plan purchases and vacant land to build on, with no price cap. Existing homes are not eligible for the first-home duty relief. The FHOG is up to $15,000. An Adelaide buyer purchasing a new townhouse at $550,000 pays zero duty and can claim the FHOG, producing a very low upfront cash requirement beyond the deposit. The same buyer purchasing an established home at $550,000 pays the general duty scale — $21,330 plus 5.5% on the amount over $500,000, which adds roughly $24,000 to the settlement costs — a stark illustration of how the new-versus-existing distinction reshapes the loan quote.
Tasmania
Tasmania’s 100% duty exemption on established homes up to $750,000 applied only to settlements between 18 February 2024 and 30 June 2026. For settlements from 1 July 2026, that exemption has lapsed in its current form. New-home purchases are supported through the FHOG of $10,000. A Hobart first-home buyer settling an established home in July 2026 faces the general duty scale: on a $550,000 purchase, duty is $5,935 plus 4% on the amount over $375,000, totalling approximately $12,935. That duty must be funded in cash and directly increases the LVR if the buyer borrows against a fixed deposit.
Australian Capital Territory
The ACT’s Home Buyer Concession Scheme exempts first-home buyers from conveyance duty on properties with a dutiable value up to $1,020,000, with a partial concession above that threshold. From 1 July 2026, the scheme no longer applies an income test. The ACT has no FHOG and no foreign-purchaser conveyance duty surcharge. A Canberra buyer at $900,000 pays zero duty, so the upfront cash requirement is the deposit plus settlement fees. At $1,100,000, a partial duty amount applies, adding a five-figure sum to the cash needed.
Northern Territory
The Northern Territory has restructured its first-home support: the old $10,000 FHOG has been replaced by the HomeGrown Territory Grant of $50,000 for first-home buyers building or buying a new home, with no price cap. A previous owner building or buying new can access the FreshStart grant of $30,000. The NT has no foreign-purchaser surcharge on transfer duty. The duty scale for a property valued at or below $525,000 uses a formula — D = (0.06571441 × V²) + 15V, where V is the dutiable value divided by 1,000 — producing a duty amount that is materially lower than many southern states. The NT Stamp Duty 2026-27: The $50,000 HomeGrown Territory Grant and Your Deposit analysis shows how a $50,000 grant can effectively become the deposit on a modest home, radically shrinking the cash a buyer must save independently.
How does LMI interact with first-home concessions and grants?
Lenders mortgage insurance is triggered when the loan-to-value ratio exceeds the lender’s threshold, typically 80%. LMI is a one-time premium paid by the borrower but capitalised onto the loan, meaning it increases the loan balance and the ongoing repayments. Every dollar of duty saved through a first-home exemption reduces the total funds required at settlement, which can lower the LVR below the 80% trigger. A grant paid in cash before settlement can be applied to the deposit, further reducing the LVR. For example, a Queensland buyer purchasing a new home at $700,000 with a 5% deposit of $35,000 and a $30,000 FHOG effectively has $65,000 in equity contribution, producing an LVR of just under 91% — still above 80%, so LMI applies, but the premium is smaller than it would be without the grant. If the same buyer scrapes together a 10% deposit of $70,000 and adds the $30,000 grant, the effective equity contribution is $100,000 and the LVR drops to just under 86%, reducing the LMI premium further. The cascade of duty exemption plus grant can make the difference between a loan that requires LMI and one that does not.
What role does the APRA serviceability buffer play in the deposit conversation?
The APRA serviceability buffer requires lenders to assess a borrower’s repayment capacity at the product rate plus 3 percentage points. This buffer does not change the deposit requirement directly, but it constrains borrowing capacity. A borrower whose capacity is squeezed by the buffer may need a larger deposit to keep the loan amount within the assessed maximum. The DTI cap introduced in February 2026 — limiting new lending at a DTI of 6 or above to 20% of each portfolio — adds a second constraint. A first-home buyer with a moderate income and a HELP debt may find that the combined effect of the buffer and the DTI cap reduces their maximum loan size, forcing a higher deposit or a lower purchase price. The HELP repayment itself reduces take-home pay: in 2026-27, repayment income between $69,529 and $129,717 triggers a 15% repayment on the amount above $69,528, which lenders treat as a committed expense that reduces net income for serviceability.
How do foreign-buyer surcharges affect a first-home buyer’s loan quote?
A first-home buyer who is an Australian citizen or permanent resident does not pay foreign-buyer surcharges. However, a buyer on a temporary visa — including a partner visa holder yet to gain permanent residency — may be classified as a foreign purchaser in some states and face an additional duty surcharge. The Foreign Buyer Surcharges 2026-27: State by State, and What They Do to a Loan Quote breakdown details how an 8% surcharge in Victoria or Queensland, or a 9% surcharge in New South Wales, adds tens of thousands of dollars to the upfront cash requirement and pushes the LVR higher. A temporary resident buying a $700,000 home in NSW pays the general duty of roughly $25,687 plus a 9% surcharge of $63,000, adding nearly $89,000 in duty alone — an amount that must be funded in cash and cannot be capitalised onto the loan. That surcharge is often the single largest line item on the settlement statement and can make the difference between a viable purchase and one that is out of reach.
Data basis, sources and time boundary
All figures in this article reflect policy settings and tax scales as at July 2026, the start of the 2026-27 financial year. Transfer duty scales and first-home concession thresholds are sourced from the revenue offices of each state and territory: Revenue NSW, the State Revenue Office Victoria, the Queensland Revenue Office, the Western Australian Department of Treasury and Finance, RevenueSA, the State Revenue Office of Tasmania, the ACT Revenue Office and the NT Territory Revenue Office. Income tax rates, HELP repayment thresholds and Medicare Levy parameters are sourced from the Australian Taxation Office. APRA serviceability buffer and DTI settings are sourced from APRA public statements, with the buffer confirmed at 3 percentage points as at May 2026. Where a concession or grant has a legislated expiry or phase-out, that is noted explicitly. Readers should verify their individual eligibility with a licensed adviser, as grant and concession rules can depend on factors including citizenship status, prior property ownership and the intended use of the property.
FAQ
Does the First Home Owner Grant count toward my deposit?
Yes, in most cases. The FHOG is paid at settlement or on the first progress payment for a construction loan, and lenders typically treat it as part of your equity contribution. A $30,000 FHOG in Queensland or a $50,000 HomeGrown Territory Grant in the NT can form a substantial portion of the deposit, reducing the cash you need to save independently and lowering your LVR.
Can I use the first-home duty exemption and the FHOG together?
Yes, in every state and territory that offers both. The duty exemption reduces or eliminates the transfer duty payable, while the FHOG provides a cash amount that can be applied to the deposit or other settlement costs. The two operate independently and stack, which is why the combined effect can dramatically shrink the upfront cash requirement.
What happens if I buy an established home instead of a new one?
The duty concession and grant treatment often differ. In South Australia, the first-home duty relief applies only to new homes, off-the-plan purchases and vacant land — an established home attracts the full general duty scale. In Tasmania, the established-home duty exemption lapsed on 30 June 2026. In Queensland, the established-home concession is capped at $700,000 full exemption, phasing to $800,000, and no FHOG is payable. The new-versus-existing choice can shift the upfront cash requirement by $20,000 to $50,000 or more, depending on the state and purchase price.
Does LMI get added to my loan or do I pay it upfront?
LMI is almost always capitalised onto the loan — added to the loan balance and repaid over the loan term. You do not need to fund it in cash at settlement. However, it increases your loan amount and your ongoing repayments, and it is assessed as part of the total debt for serviceability purposes.
How does my HELP debt affect the loan quote?
Your HELP repayment is treated as a committed expense by lenders, reducing your net income for serviceability assessment. In 2026-27, if your repayment income is between $69,529 and $129,717, you repay 15% of the amount above $69,528. A borrower earning $90,000 repays approximately $3,070 per year, or about $256 per month, which directly reduces the maximum loan amount a lender will approve under the APRA buffer test.
Where to Go From Here
Policy settings tell you the size of the cheque you need at settlement; they do not tell you whether the loan behind it actually works. If you want the duty, deposit, LMI and assessed repayment modelled together against your real income and commitments, a licensed Arrivau mortgage adviser can review your position and come back to you within one business day.
This article is general information only and does not constitute financial, tax or legal advice. Rates, thresholds and eligibility rules change. Confirm your own position with the ATO, the relevant state or territory Revenue Office, or a licensed adviser before acting.