Are you planning to buy or build your first home in Victoria? You might be happy to hear that the state government offers financial assistance to help you achieve your goal of becoming a homeowner.
Purchasing your first home in 2023 is a significant milestone. Not only does it involve a substantial financial commitment, but it can also be quite perplexing due to the abundance of unfamiliar terms and various incentives. In this article, we'll discuss the concessions, incentives, and First Home Buyers grant Vic and Melbourne. So, let’s get started!
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Stamp Duty Savings for First Home Buyers
First time buyer stamp duty simply means you get a discount on the stamp duty you must pay when purchasing a property. On the other hand, a stamp duty exemption is even better – it means you don't have to pay any stamp duty. And here's the good news: These concessions and exemptions apply to properties all across Melbourne and Victoria.
If the property you're buying is valued at $600,000 or less, you won't have to pay a single cent in stamp duty. That's right, zero. To put it in perspective, a $600,000 property translates to a substantial savings of up to $31,070. It's a generous offer from the state government aimed at helping you step into your first home.
If your property falls within the $600,001 to $750,000 range, you'll pay stamp duty on a sliding scale.
First Home Owner Grant in Victoria
The First Home Owner Grant sets itself apart from the stamp duty concession because, in this case, the government actually puts money in your pocket – a generous sum of $10,000 if you're purchasing or constructing a new property in Melbourne or Victoria. However, it's important to note that with the introduction of the stamp duty concession, the First Home Owner Grant is exclusively available to those who are building or buying a completely brand-new property. Unfortunately, the First Home Owner Grant won't apply to your situation if you're in the market for an established property.
To qualify for this $10,000 grant in 2023, you'll need to purchase a new property valued at up to $750,000 that has never been occupied, or you must be in the process of constructing a new property with the same value.
First Home Guarantee
The First Home Guarantee, formerly known as the First Home Loan Deposit Scheme, is a Federal Government initiative that aims to provide vital support to eligible First Home Buyers in Victoria and across the entire nation, including Melbourne. Typically, purchasing a home demands a hefty 20% deposit. However, thanks to the National Housing Finance and Investment Corporation (NHFIC), eligible individuals can now benefit from a guarantee covering up to 15% of their deposit. This effectively means you would only require a 5% deposit to take the significant step toward owning your first home. While there are property value restrictions, the good news is that the scheme has been expanded to accommodate an additional 35,000 borrowers each financial year, working in partnership with 27 different lenders for the fiscal year 2022/2023.
First Home Owner Grant (FHOG)
If you're buying or building a new home in metropolitan Melbourne, you may be eligible to receive a $10,000 grant through the First Home Owner Grant (FHOG).
Who Can Access It?
The FHOG is accessible to first home buyers of new homes with a price tag of $750,000 or less.
To qualify for the First Home Owner Grant, you need to meet the following criteria:
- You must be at least 18 years old at the contract date.
- At least one of the first home buyers must be Australian citizens or permanent residents.
- You must be an individual, not representing a company or trust.
- You and your spouse or partner must not have previously owned or co-owned residential property in Australia.
- You and your spouse or partner must not have received a first home buyer grant in Australia before.
You or one of the other first home buyers must move into the new home as your primary place of residence within 12 months of purchasing the property and reside there continuously for at least 12 months. However, there's an exemption for Australian Defence Force personnel who are either on duty or leave and enrolled to vote in Victorian state elections.
How It Works
To be eligible for the First Home Owner Grant (FHOG), you must purchase or construct your first new home. This includes:
- A newly constructed property, your first-ever home.
- An existing new property, less than five years old, being sold for the first time as a new residential premise.
- A land and building package.
- Vacant land on which you plan to build a new home.
How to Apply for Your FHOG
If you're applying for the FHOG through an approved agent, such as your lender (which can be a bank or another financial institution), they will submit the application form on your behalf. Your responsibility is to sign the form and have it properly witnessed.
Or, if you are applying for the FHOG directly through the State Revenue Office, you can visit sro.vic.gov.au to access the application form and detailed instructions. Be sure to submit your application within 12 months of the settlement or completion of construction.
First Home Buyers Super Saver Scheme
The First Home Super Saver Scheme is a smart way to accelerate your savings for your first home. It empowers you to stash away money in your superannuation, allowing you to build your savings more quickly than traditional savings methods, all thanks to the favourable tax treatment within your super fund.
Here's how it works:
- You can contribute additional super fund contributions, either before-tax (concessional) or after-tax (non-concessional).
- You can withdraw up to the cap of $15,000 in any given year and up to a total of $50,000 across all years. Importantly, this cap applies individually, which means that couples can jointly save up to a substantial $100,000.
Houst: Your Rental Management Partner in Victoria
Looking to list your home on Airbnb and generate extra income? Consider partnering with Houst. Our team takes on all landlord responsibilities in Victoria, ensuring your property is rented out in compliance with the law. We handle all the details, from managing Airbnb bookings to maintaining your property. Let Houst simplify the process and maximise your rental yields.