First Home Buyer Grants: What’s on offer?
As an aspiring home buyer, you may have heard about various grants designed to get you into your first home.
It can be a little confusing as there is assistance from both state and federal governments on offer.
To add a little more confusion, where you live will also influence how much you are entitled to.
The hardest part of buying your first home is often saving enough deposit to avoid paying LMI (Lenders Mortgage Insurance).
This means you would generally need 20% of the purchase price plus costs which include legal fees and stamp duty.
The First Home Loan Deposit Scheme (FHLDS) is a Commonwealth Government initiative for first home buyers where the government supports the home buyer by underwriting the loan with a group of selected lenders.
This means as a first home buyer you can buy your own home with as little as 5% deposit. You will need a little bit more than this to cover associated costs such as legal fees and stamp duty but more on that below.
In its current form you must build a new property to take advantage of the FHLDS. Price thresholds also apply depending on which area you are looking to purchase in.
As an economic support measure, the Commonwealth Government also announced its Homebuilder initiative.
This initiative is designed to support the construction industry by encouraging new building activity.
A $15,000 grant is available for new builds to both first home buyers and people who have owned property before. The grant is only available for owner occupied purposes and cost caps apply.
In recognition of the costs associated with purchasing your first home, the Qld Government has offered different levels of support to owner occupiers for quite some time.
For first home buyers there is a $15,000 grant available to build a new home. There are some costs caps that apply to this grant as well.
Stamp duty concessions apply for both first home buyers and subsequent buyers of owner-occupied properties that are already built.
How Much Do I Need?
Let’s look at what is required for a first home build of $600,000 assuming $300,000 for land and $300,000 for the build portion.
5% deposit $30,000
Land stamp duty $4,959
Legal fees $2,500 (approx.)
Total required $37,459
There are some special requirements for saving the deposit.
Lenders will want to see that you have been able to save the money yourself as this shows good character.
In some situations, a gift from parents may be accepted but different lenders have different policies that need to be adhered to.
The QLD Government First Home Owners Grant of $15,000 and the Commonwealth Government HomeBuilder Grant of $15,000 means you will get $30,000 back in your pocket.
The QLD Government First Home Owners Grant and HomeBuilder are both paid once the slab has been completed.
With interest rates at an all time low, there has never been a better time to get into your own home.
T’s and C’s apply. Subject to lenders criteria and acceptance. Eligibility criteria apply for grants and application is required.