ATTENTION FIRST HOME BUYERS!!!!

Did you know?

YOU only need a 5% DEPOSIT NOW TO BUY/BUILD YOUR FIRST HOUSE!

Meaning for a $400,000 home/build you ONLY NEED A DEPOSIT OF $20,000

So, get in quick as the First Home Loan Deposit Scheme

CLOSES 30/6/22

First Home Owner Grant

A $10,000 First Homeowner Grant (FHOG) is available to those 18 years and over when you buy or build your first new home. Your first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated. For new properties (and the substantially renovated) the value must not exceed $600,000. For land that you plan to build on, the total (land and build) must not exceed $750,000.

First Home Buyer Assistance Scheme

First-time buyers of existing homes will pay no transfer (stamp) duty on property worth less than $650,000. If an existing home is valued between $650,000 and $800,000, you can apply for a concessional transfer duty rate, which will be based on the value of your home.

For new homes, you can apply for a full exemption to pay no transfer duty on new homes worth less than $800,000. If your new home is valued between $800,000 and $1 million, you can apply for a concessional transfer duty rate, which will vary based on the value of your home.

You won’t pay transfer duty on vacant land worth less than $400,000, and a concessional rate on land up to $500,000. The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.

10,000 First Home Loan Deposit Scheme places will be available to eligible first home buyers from 1 July 2021 to 30 June 2022.The Australian Government is issuing 4,651 additional guarantees to support first home buyers who haven’t had an opportunity to purchase their first home, including because of COVID disruptions. These scheme places are available from Monday, 31 January 2022.

Usually, first home buyers with less than a 20% deposit need to pay lenders mortgage insurance.

Under this Scheme, part of an eligible first home buyer’s home loan from a Participating Lender will be guaranteed by NHFIC. This is aimed at enabling you to purchase your first home sooner with as little as a 5% deposit.

Any guarantee of your home loan is for up to a maximum amount of 15% of the value of your property (as assessed by your lender). This guarantee is not a cash payment or a deposit for your home loan.

If your home loan is covered by this Scheme, you can also access other government programs – like the Australian Government’s First Home Super Saver Scheme, Home Builder Grant or First Homeowner Grant and concessions that may be offered by State and Territory governments. These other programs apply their own criteria and conditions, and you should make your own enquiries on their terms.

What type of home can I buy?

For a property to be eligible it must be a ‘residential property’ – this term has a particular meaning under this Scheme. Eligible residential properties include:

• an existing house, townhouse, or apartment
• a house and land package
• land and a separate contract to build a home
• an off-the-plan apartment or townhouse
• Specific dates and requirements apply for the different property types.

Contact a Participating Lender for the full list of property criteria and Scheme requirements, or if you are unsure what type of property you are buying.

What are the important timeframes?

Different timeframes can apply to your Scheme place, depending on the type of home you buy.

To be eligible for this Scheme, the contract of sale and (if applicable) eligible building contract may have particular dates when they can be signed by you. There are no exceptions from these required dates.

This scheme allows you to save toward your home deposit within your super fund and reduce your taxable income.

Eligible first-home buyers can use their voluntary super contributions of up to $15,000 each financial year to help with the purchase of their first property. It is considered beneficial because you’ll pay less tax than you would if you decided to put your deposit into a traditional savings account.

You can only withdraw funds that you voluntarily make into your super (outside of employer contributions), either through salary sacrifice that you arrange with your employer or through voluntary contributions from your after-tax income (that you can then claim a tax deduction on). You need to file a ‘notice of intent for the latter.

Note that there is a cap on the amount of “concessional” or tax-advantaged contributions you can make each year. From 1 July 2021, the concessional contributions cap is $27,500 (up from $25,000 in 2021). There is also a cap on the amount you can withdraw to put toward your deposit – currently, $30,000 (plus earnings) but the government recently announced this will change from July 1, 2022 to $50,000. Click here for more detailed information.

Family Home Guarantee

This federal scheme allows eligible single-parent borrowers to buy a home with just a 2 percent deposit and avoid LMI, whether they’re first-time buyers or not. There will be 10,000 Family Home Guarantees made available over four financial years from 1 July 2021 to 30 June 2025.

One-off transfer duty concessions (*Formerly known as stamp duty.) If you don’t happen to qualify for any grants but are a first home buyer, you might be able to take advantage of a one-off transfer* duty discount or exemption, depending on the type of property you buy and the purchase price. This can save you a lot of money.

Where can I apply?

All applications for the First Home Loan Deposit Scheme need to be made directly with one of the Scheme’s Participating Lenders (or their authorised representatives, i.e. a mortgage broker).

NHFIC does not accept, assess, approve, or maintain waitlists for any Scheme place applications.

Once your tax return has been processed, the Australian Taxation Office (ATO) sends a statement called the Notice of Assessment to your myGov Inbox. For Scheme reservations made from 1 July 2021 to 30 June 2022, the relevant Notice of Assessment is the 2020-2021 financial year. Participating Lenders will need to sight your Notice of Assessment for the 2020-2021 financial year in order to issue a scheme place pre-approval.

We encourage you to speak to your Participating Lender to understand the risk of signing a Contract of Sale prior to obtaining the latest Notice of Assessment.

Should I apply for this Scheme?

For a successful application, key criteria include:

• applying as an individual or couple (married / de facto)
• being Australian citizen(s) at the time you enter the loan
• being at least 18 years of age
• earning up to $125,000 for individuals or $200,000 for couples
• you must intend to be owner-occupiers of the purchased property
• you must be first home buyers who have not previously owned or had an interest in, a property in Australia

Contact a Participating Lender for a full list of criteria, or if you have any questions about your home loan application. NHFIC cannot provide personal financial advice and we encourage applicants to seek their own independent financial and legal advice for their own personal circumstances.

How much do I need to save?

You need to have between 5% and 20% of the value of an eligible property saved as a deposit.

While the minimum deposit required by this Scheme is 5%, Participating Lenders may require a higher percentage deposit based on their financial circumstances. Speak with your lender to find out whether the deposit you have is made up of genuine savings for the purposes of their lending criteria and this Scheme.

You should also confirm with your lender whether any cash grants under other Australian Government, State or Territory schemes or programs you may receive can be considered as part of your genuine savings.

Contact a Participating Lender to check your personal circumstances.

Sourced from:

https://www.nine.com.au/property/homes/first-home-buyer-government-grants-schemes-concessions-2022/
https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/first-home-loan-deposit-scheme/how-to-apply/
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