Does buying your first home seem about as likely as picking the winning trifecta in the Melbourne Cup? It’s not easy by any means, but don’t be disheartened – there’s a range of grants, incentives and programs you could take advantage of to get into your own home sooner rather than later.
But first, let’s not sugar-coat it. Saving a home loan deposit is hard. It’s much harder than it was for me 20 years ago when I bought a small townhouse in regional Queensland for $153,000 as my first foray into home ownership.
That’s a far cry from where property values are now. The median price for a home in regional Australia is just shy of $600,000, and you’ll need well north of $1 million to cover the median price in the nation’s most expensive capital.
So, with this as context, let’s dive into the options for first-home buyers, based on the median property prices for where you live, to give you an understanding of what government assistance you might be able to take advantage of.
Median property price: $1.11 million
I’m going to be brutally honest: if you want to buy a home within 10–12km of the CBD, there’s not much government support available to you. The median property price is now an eye-watering seven figures, so Sydney-dwellers are undoubtedly on the “losing” side of this situation.
If you’re prepared to live further out or in a regional community, then there are some incentives you can take advantage of.
First, you can get a $10,000 grant when building a new home under the First Home Owner Grant (New Homes) scheme. A few caveats: the value of the property must be $600,000 or under, or $750,000 for a house-and-land package.
Also, the First Home Buyers Assistance scheme provides first-time buyers in NSW with stamp duty exemptions, which could save you literally tens of thousands of dollars. You’ll get a full exemption when purchasing a new or existing home up to $800,000, and a discount between $800,001 and $1 million. If you buy vacant land under $350,000, you’ll pay no stamp duty, and you’ll receive a discount if it’s between $350,000 and $450,000.
But, based on the median price of $1.11 million, you can expect to pay stamp duty of… deep breath… $46,868.50.
Median property price: $776,716
The Sydney v Melbourne discourse over which city is the better place to live comes to a grinding halt when the discussion moves to property.
Why? Because Melburnians are, hands down, the winners here: the median house price is a massive $334,000 less in Melbourne than in Sydney.
Still, based on the median figure of $776,716, as a first-time buyer in Victoria, you’re not entitled to the state’s $10,000 First Home Owner Grant. It’s only available to eligible applicants buying or building a new home valued at up to $750,000.
You’ll also miss out on Victoria’s stamp duty discounts, because these cap out at $750,000. First-home buyers purchasing a new or established home valued below $600,000 will be exempt from paying stamp duty altogether, while buyers of homes priced between $600,001 and $750,000 are eligible for a stamp duty concession, applied on a sliding scale.
If you fall in love with a home around the median price of $770,000, you’ll need to stump up $41,270 in stamp duty.
Bottom line: if you can find something below $750k, you’ll have access to tens of thousands in grants and stamp duty discounts.
Median property price: $761,739
There used to be a massive gulf between Brisbane and Melbourne when it came to property prices, but the capital of the Sunshine State is catching up to its southern counterpart.
Again, the Queensland First Home Owners Grant is offered on homes priced at up to $750,000 so, based on the median, you’d be entitled to nada. If you can find something below this price, the grant now offers a generous $30,000 to first-time owners buying or building a new home.
Meanwhile, there is a first-home stamp duty concession available, but the financial bar is set a lot lower here, with Queensland’s first-home buyer stamp duty exemption only available on properties priced up to $550,000.
If you buy a home around the median at $760,000, expect to pay around $9,383 stamp duty.
Median property price: $691,591
In Adelaide, the median values are more affordable than in the east, but the first-home owner grant cap of $650,000 is lower than the median. If you can find a brand new home or build your own home under this price point, you may be eligible for $15,000. You’ll also get a 100 per cent stamp duty waiver on homes under $650k and a discount if you pay between $650,000 and $700,000.
Median property price: $658,994
Hobart residents are possibly the biggest winners of all when it comes to the state’s first-home owner grant, which is worth a whopping $30,000. There is one big caveat, however: existing houses don’t qualify, so it must be a new home (or you enter a contract to build).
Also, Tassie has one of the least-generous stamp duty discount policies on offer for first-home buyers: 50 per cent off, on homes up to $400,000. On a median-priced home, you’re looking at a stamp duty bill of more than $26k.
Median property price: $836,327
Now officially ranked as the second-most expensive state or territory in Australia to buy a home, Canberra offers no first-home owner grants to its residents. You may be eligible for a stamp duty waiver if the buyers combined earn less than $170,000 (a little more if you have dependent children). The value of the first-home buyer concession you can receive is capped – for 2023/24, it's a hefty $34,504.
Median property price: $493,362
Residents of the Top End are clear winners in the race to home ownership. The Northern Territory’s $10,000 FHOG is available to eligible applicants who purchase or construct a new home – and no limit applies to the value of the property you buy or build. There are also no income restrictions.
There are also no stamp duty discounts specifically for first-home buyers, but there is a stamp duty exemption in the NT for those buying a house-and-land package.
Median property price: $618,363
A grant of $10,000 is available when buying or building a new home in WA, but some quirky lines have been drawn in the sand (quite literally) around eligibility requirements.
Properties located south of the 26th parallel south latitude must be priced at less than $750,000 to qualify. Properties north of the 26th parallel south latitude can be valued at up to $1 million. The First Home Owner Rate of Duty also provides stamp duty exemptions when purchasing homes valued at less than $530,000 and vacant land less than $400,000.
Federal programs for all first-time buyers
Even with these state-based schemes, grants and discounts, first-home buyers may wonder if they’ll ever get into the market. It’s certainly become far more expensive to buy now than it was two years ago. Finder research shows that the 400-basis-point increase in the cash rate since May 2022 has added $14,688 to the annual cost of paying for an average $585,000 mortgage in Australia.
But it’s not all grim news. You could qualify for the federal First Home Super Saver Scheme, which helps you save more quickly for a deposit using tax breaks. This is available across the country, no matter where you live, and allows you to pay less tax and save more towards your home deposit.
The First Home Guarantee (formerly the First Home Loan Deposit Scheme) also could help all first-time buyers nationally to buy with a deposit as low as just 5 per cent, if you have the income to support the larger loan size.
Other options for would-be buyers
While there are grades of winners and losers depending on where you live, the big thing for would-be buyers to keep in mind is that home ownership is still possible – it just may require a different path to get there.
It could mean buying a property somewhere else where you can afford and renting a home where you want to live. It might mean moving in with your parents for a year or two to save a big deposit. Or perhaps a joint venture with a sibling or relatives might be your ticket to home ownership?
Keep an open mind, explore all options and take advantage of any leg-up the government is willing to offer along the way.