Buying your first home in Australia means facing two unavoidable large expenses: stamp duty and the deposit. The good news is that both the federal government and the state and territory governments have dedicated support mechanisms to help first home buyers reduce upfront costs. Understanding how these policies can be stacked together is the first step in building your purchase budget.
At the Federal Level: The First Home Guarantee
The federal government’s core support is the First Home Guarantee. This scheme allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI). Normally, when the deposit is below 20%, banks require the borrower to take out LMI, a cost that can run to thousands or even tens of thousands of dollars. Through the Guarantee, the federal government effectively guarantees the remaining 15% of the loan amount, saving buyers this expense.
The scheme has a fixed number of places each year, with clear caps on applicants’ income and on the price of the property purchased. Applicants must be first home buyers and must use the property as their principal place of residence. The specific income thresholds and property price caps vary by region, so it is best to check the National Housing Finance and Investment Corporation (NHFIC) website directly for the latest parameters.
At the federal level there are also schemes for specific groups: the Family Home Guarantee and the Regional First Home Buyer Guarantee, aimed respectively at single parents and at first home buyers purchasing in regional areas, with eligibility conditions that differ from the standard Guarantee.
At the State and Territory Level: First Home Owner Grants
The First Home Owner Grant (FHOG) is a cash grant administered and paid out independently by each state and territory government, and it can be applied for at the same time as the federal Guarantee. The amount, eligibility conditions and application process differ by jurisdiction, but some common principles apply.
Who it is for: most jurisdictions require applicants to be Australian citizens or permanent residents who have never previously held a residential property title anywhere in Australia. Some jurisdictions have special rules for buyers holding certain temporary visas, but overall, temporary visa holders are usually not covered by this grant.
Property type restrictions: the First Home Owner Grant usually applies only to new dwellings, including buying a newly built home, buying off-the-plan, or signing a house and land package. Purchasing an established second-hand home generally does not qualify for the grant, though second-hand buyers may still benefit from stamp duty concessions.
Residency requirements: after receiving the grant, applicants must move into the property within the required period after settlement and live there continuously as their principal place of residence for a set length of time, commonly a continuous period of six months or more. If the residency requirement is not met, the government can recover the grant already paid.
The specific grant amounts, property price caps and eligibility conditions in each state and territory differ, and the policies are adjusted regularly. The following is a general indication of each jurisdiction’s policy; the exact figures and thresholds must be confirmed against the latest information published on each State Revenue Office website:
- New South Wales: the grant mainly targets first home buyers purchasing newly built properties, with a cap on the purchase price. The state also offers stamp duty exemptions or concessions on properties in certain price bands.
- Victoria: the grant applies to new dwellings, with a cap on property value. For stamp duty, the state provides tiered concessions for eligible first home buyers purchasing an owner-occupied property.
- Queensland: the grant targets new properties, with a relatively generous price cap. Stamp duty concessions cover both new and second-hand dwellings, with the concession tapering as the price rises.
- Western Australia: the grant amount and price cap differ from other states, with a separate stamp duty concession policy and special rules for land and building contracts.
- South Australia: the grant applies only to new dwellings, with the price cap varying by property type and region.
- Tasmania: the grant is open to first home buyers purchasing new dwellings and off-the-plan properties, alongside stamp duty concessions.
- Australian Capital Territory: the territory has progressively phased out stamp duty in favour of land tax, but first home buyers can still access specific purchase assistance schemes.
- Northern Territory: the grant amount is relatively generous, supporting first home buyers of new dwellings and those building their own home, with stamp duty concessions as well.
Stamp Duty Concessions: Another Important Benefit
Stamp duty is a tax paid to the state or territory government when purchasing a property, usually a percentage of the price, and can amount to tens of thousands of dollars. For first home buyers, most jurisdictions offer stamp duty concessions or exemptions, and this benefit is generally independent of the First Home Owner Grant, so both can be applied for at the same time.
The typical model for stamp duty concessions is tiered: when the property price is below a threshold, a full exemption may apply; within a certain price band, a partial concession applies; above the cap, no benefit is available. Unlike the First Home Owner Grant, stamp duty concessions are usually not limited to new dwellings — first home buyers of second-hand homes may also benefit, though the specific conditions still depend on each jurisdiction’s rules.
Note that stamp duty concessions usually require the buyer to use the property as their principal place of residence, with a residency period similar to that of the First Home Owner Grant. If the residency condition is not met after purchase, the tax already conceded may be clawed back.
How to Stack These Policies
First home buyers can apply at the same time for the federal Guarantee, the state or territory First Home Owner Grant and stamp duty concessions — the three are not mutually exclusive. A typical purchase scenario: the buyer gets a loan through the federal Guarantee with a 5% deposit, simultaneously applies to their state for the First Home Owner Grant to boost the deposit or renovation budget, and enjoys stamp duty concessions at settlement to reduce upfront tax costs.
However, each policy has its own eligibility conditions, deadlines and place caps, and the details can be adjusted at any time. Buyers should verify their eligibility item by item before making any financial commitment. The most reliable approach is to visit each State Revenue Office website and the federal NHFIC website directly for the currently valid policy documents, or to consult a licensed conveyancer and an independent financial adviser.
A Note for Temporary Visa Holders
Temporary visa holders, including student visa (Subclass 500) and temporary graduate visa (Subclass 485) holders, differ significantly from citizens and permanent residents in their eligibility to buy property and in the government support available to them. Foreign investors buying residential property in Australia generally need approval from the Foreign Investment Review Board (FIRB), and in most cases can only buy new dwellings or off-the-plan properties; buying second-hand dwellings is strictly limited. At the same time, temporary visa holders usually do not qualify for the First Home Owner Grant or the federal Guarantee, and may also have to pay an additional foreign buyer stamp duty surcharge. The surcharge rates and rules for foreign buyers differ by state, so always confirm with the State Revenue Office before purchasing.
First Home Owner Grants and stamp duty concessions are important parts of Australia’s housing affordability policy system, but they are not set in stone. State governments adjust policy parameters according to fiscal conditions and changes in the housing market. Buyers should rely on the policy in force at the time of settlement, not on outdated information or other people’s experiences. Before signing any contract, always complete an eligibility self-check and cost estimate through official channels.