Understanding home buyer support
Buying a property involves more than finding the right home and securing a loan. Saving a deposit and covering upfront purchasing costs can represent a significant hurdle, particularly for first-home buyers.
Fortunately, several Australian Government and state or territory initiatives may assist eligible buyers.
Importantly, these programs are not all technically “grants”. Some provide guarantees, others use shared equity arrangements, while states and territories may offer grants or stamp duty concessions.
Australian Government 5% Deposit Scheme
The Australian Government 5% Deposit Scheme is designed to help eligible buyers purchase a home with a smaller deposit.
Moneysmart notes that the scheme can support eligible first-home buyers, regional buyers and single parents or guardians to purchase with a smaller deposit while avoiding lenders mortgage insurance.
Eligibility requirements and property price caps apply, so it’s important to check the current rules before making purchasing decisions.
Australian Government Help to Buy Scheme
Help to Buy operates differently because it is a shared-equity scheme.
Eligible buyers need a minimum 2% deposit and a home loan from a participating lender. The Australian Government can contribute up to 30% of the purchase price of an existing property or 40% for a newly built home. In return, the Government retains a corresponding equity share in the property.
Income thresholds, property price caps and other eligibility requirements apply and can change over time.
First Home Super Saver Scheme
The First Home Super Saver Scheme may also help eligible first-home buyers save for a deposit through voluntary contributions to superannuation.
Eligible voluntary contributions can be released under the scheme, subject to its rules and limits. The ATO currently states that eligible participants can contribute up to $15,000 per financial year towards the scheme, up to an overall maximum of $50,000.
Because superannuation and tax rules are involved, it’s important to understand the requirements before relying on the scheme as part of your home-buying strategy.
State and territory assistance
Depending on where you’re purchasing, additional support may be available through your state or territory government.
This can include first-home owner grants, stamp duty concessions or exemptions and other targeted home buyer initiatives.
The availability and eligibility requirements for these programs vary considerably between jurisdictions and can change, so buyers should check the current rules that apply to the location and type of property they’re considering.
Can you combine different forms of assistance?
Sometimes, but not always.
Different programs have their own rules about whether they can be used alongside another government initiative. For example, Help to Buy restricts participation in certain other government housing assistance arrangements, although some grants, concessions and exemptions may still be available.
This is one reason it’s useful to investigate your eligibility before deciding how much you need to save or which loan to apply for.
Start by understanding your options
Government assistance can potentially make home ownership more accessible, but the right option will depend on your income, deposit, property, location and personal circumstances.
At Iron Advantage, we can help you understand your borrowing position, explore suitable lending options and identify relevant home buyer support as part of your property finance journey.
