For the majority of Australians, buying a home for the first time is a top financial priority, especially given the current state of the housing market throughout the country. Low interest rates and a wide range of properties both new and established lay the foundation for making the dream of being a home owner a reality. In addition, first time home buyers have additional incentives provided through the Australian government that offer a great deal of financial assistance during the home buying process, known as the first home buyers grant.
The First Home Buyers Grant
For individuals interested in buying their first property, certain concessions are made available through both federal government and state specific government programs that can make the process much less stressful from a financial perspective. The first home buyers grant provides for a one-off concession meant to reduce the financial burden associated with the Goods and Services Tax assessed on the purchase of an established home or the construction of a new property. The federal government makes this grant available to those who have not previously received the grant who are Australian residents for at least the past 12 months. In addition to this federal grant, each state has its own scheme that provides additional incentives up to specified limitations. For instance, New South Wales offers an additional $3,000 to first timers as well as an exemption from stamp duty, up to $17,900. Victoria offers a grant of up to $11,000 for new construction and $2,000 for established homes, while South Australia provides up to $4,000 for its first time buyers. Tasmania offers a stamp duty concession up to $4,000, and Western Australia provides for no stamp duty on properties that are worth up to $500,000.
Although each state has its own supplement to the grant, borrowers should be aware of the limitations inherent to the grant programs. First, all individuals on the mortgage loan must be an Australian resident, and the property must be used as the primary residence within 12 months of purchase. Additionally, individuals applying for the first home buyers grant should not have previously received grant funds, and home prices should not exceed $750,000 in New South Wales, Northern Territory, Queensland, Victoria and Western Australia. For the Australian Capital Territory and South Australia, there is no property price limitation. Those receiving the grant should also be aware that it is not means tested, so there is no income limit applied to the grant, and the proceeds are not taxable. If you are in the market for your first property, the first home buyers grant can make purchasing a home less of a financial burden for those who qualify.