Save Big on Your First Home: A Guide to Victorian Property Grants and Schemes
Grants and Assistance Programs for First-Time Home Buyers in Victoria
Navigating the property market as a first-time buyer can be overwhelming, but the Victorian and federal governments offer several grants and assistance programs to make homeownership more accessible. This guide breaks down the key programs, their eligibility requirements, and the pros and cons to help you make informed decisions.
1. First Home Owner Grant (FHOG)
The First Home Owner Grant (FHOG) is one of Victoria’s most popular programs for first-time buyers. It provides a $10,000 grant for purchasing or building a new home valued up to $750,000. For regional Victoria, the grant increases to $20,000.
Eligibility:
Must be a first-time homebuyer.
Applicable to new homes only (existing homes are excluded).
Property value must not exceed $750,000.
You must live in the property as your principal residence for at least 12 months.
How to Apply:
Applications can be made through your lender or directly via the State Revenue Office of Victoria.
Pros:
Significant financial aid for upfront costs.
Higher grant amount in regional areas encourages buyers to explore more affordable markets.
Cons:
Excludes existing homes, limiting property options.
Strict residency requirements.
The $750,000 cap can be restrictive in competitive markets.
2. First Home Loan Deposit Scheme (FHLDS)
The First Home Loan Deposit Scheme (FHLDS) allows eligible buyers to purchase a property with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the loan.
Eligibility:
Must be an Australian citizen.
Individual income cap: $125,000; couples: $200,000.
Minimum 5% deposit saved.
Property price caps: $800,000 in Melbourne, $500,000 in regional Victoria.
How to Apply:
Apply through participating lenders. Places are limited and renewed annually.
Pros:
Makes homeownership possible with a smaller deposit.
Eliminates costly LMI, saving thousands.
Opens opportunities for first-time buyers in Melbourne and regional areas.
Cons:
Limited spots lead to high competition.
Property price caps may exclude many desirable homes.
Income thresholds limit accessibility for higher earners.
3. Stamp Duty Exemptions and Concessions
Stamp duty is a significant cost for homebuyers, but first-time buyers in Victoria can access full exemptions for properties valued up to $600,000. For properties priced between $600,001 and $750,000, partial concessions are available.
Eligibility:
Must be a first-home buyer.
Property must be under $750,000.
How to Apply:
Exemptions and concessions are automatically applied during the property settlement process.
Pros:
Substantial savings for homes under $750,000.
No separate application process simplifies access.
Cons:
Limited to properties under $750,000.
Buyers purchasing homes over $600,000 may still face significant costs.
4. First Home Super Saver Scheme (FHSSS)
The First Home Super Saver Scheme (FHSSS) allows first-time buyers to save for a deposit through their superannuation. You can contribute up to $15,000 per year (and a total of $30,000) to your super fund, benefiting from lower tax rates.
Eligibility:
Must be a first-time buyer.
Intend to live in the property as your primary residence for at least six months within the first year of ownership.
How to Apply:
Applications are managed via the Australian Tax Office (ATO).
Pros:
Tax benefits allow faster savings.
Contributions grow more efficiently than in a traditional savings account.
Cons:
Capped at $30,000, which may be insufficient in high-cost markets.
Withdrawn funds are taxed, reducing the final amount available.
5. Victorian Homebuyer Fund
The Victorian Homebuyer Fund is a shared equity scheme where the government contributes up to 25% of the purchase price, reducing the need for a large deposit and LMI. Buyers retain ownership but repay the government’s share over time.
Eligibility:
Minimum 5% deposit.
Property price caps: $950,000 in Melbourne and Geelong, $600,000 in regional Victoria.
Must be an Australian citizen or permanent resident.
How to Apply:
Applications can be made via the Victorian Government’s official website.
Pros:
Enables buyers to enter the market sooner.
Eliminates the need for LMI.
Suitable for those with limited savings.
Cons:
Shared equity means the government holds a stake in your property.
Price caps can restrict property options.
Repaying the government’s share can be financially demanding.
6. Regional First Home Buyer Support
Incentives for buying in regional Victoria include a $20,000 FHOG and access to schemes like the FHLDS and stamp duty exemptions. With generally lower property prices, buying in regional areas can be more affordable.
Pros:
Higher grant amount for regional buyers.
Lower property prices make homeownership more accessible.
Cons:
Limited to new homes, restricting options.
Requires a commitment to regional living, which may not suit everyone.
Making the Right Choice
Each grant and scheme offers unique advantages and challenges. Here’s a quick comparison:
ProgramProsConsFHOGFinancial boost; encourages regional buyingLimited to new homes; residency requirementsFHLDSLower deposit; no LMILimited spots; income and price capsStamp Duty ExemptionsSignificant savings; automatic applicationLimited to properties under $750,000FHSSSTax benefits for deposit savingsComplex rules; capped contributionsHomebuyer FundLow deposit; quicker entry to marketShared equity; repayment obligationsRegional SupportHigher grants; lower property pricesNew homes only; limited regional options
By understanding your eligibility and the benefits of these programs, you can take meaningful steps toward homeownership. Always consult with a financial advisor or property expert to tailor these options to your needs.
