Current Government Grants Available to Brisbane First Home Buyers
According to many industry experts, there’s never been a better time to buy a property in Brisbane. The rebounding economy, increased interstate migration and a surge in first home buyers have all combined to boost property prices throughout Queensland, with steady growth forecast to continue throughout 2021. As per Terry Ryder, a property analyst with over 35 years of industry experience, the booming market can also be credited towards the favourable conditions buyers are currently experiencing. “Interest rates have never been lower,” he notes, and “the level of government grants for first home buyers in Brisbane has never been higher.”
So, what government grants are currently available for Brisbane first home buyers? Is it solely for the assistance of those purchasing their first home, or can others benefit too? And what are the eligibility requirements for government grants?
First Home Loan Deposit Scheme
- What is the First Home Loan Deposit Scheme? Launched at the start of 2020, the Scheme is aimed at first home buyers and is managed by the National Housing Finance and Investment Corporation (NHFIC). Ordinarily, if a first home buyer has a deposit of less than 20%, they are required to pay Lender’s Mortgage Insurance (LMI). Under the First Home Loan Deposit Scheme, eligible buyers can have a deposit of just 5% and the NHFIC will act as a guarantee on the remaining 15% of the property value.
- Who is Eligible for the First Home Loan Deposit Scheme? While the original Scheme covered the purchase of new and existing homes, the 2020-2021 Budget included 10,000 additional places that are specifically for people buying or building a new home. Eligibility is means-tested, so only singles earning up to $125,000 per year are eligible (or $200,000 per year for a couple). You must also meet the minimum age requirement (18), have at least 5% of the property price in genuine savings, satisfy the owner-occupier test and be a legitimate first home buyer. For more information on eligibility criteria, see the NHFIC website.
- What Are the Benefits of the First Home Loan Deposit Scheme? The First Home Loan Deposit Scheme has only been available for just on a year, but data from the government shows it is already making an impact. Thanks to the First Home Loan Deposit Scheme, the average first home buyer is now able to purchase a property four years earlier than they had originally planned.
- What Else Do I Need to Know About the First Home Loan Deposit Scheme? Currently, the NHFIC are only accepting the first 10,000 eligible applications of each financial year, with a cut off date of 30th June 2021. So, if you think you may be eligible, talk to a broker about applying as soon as possible.
- What is the HomeBuilder Grant? The HomeBuilder Grant is a tax-free cash payment available to eligible first home buyers and existing homeowners. Provided by the Federal Government, HomeBuilder was designed to help kick-start the residential construction industry following months of COVID related cancellations and lockdowns. As such, the funds must be used to either build a new home or substantially renovate an existing home.
- Who is Eligible for the HomeBuilder Grant? To qualify for the HomeBuilder Grant you will need to be an Australian citizen, at least 18 years old and be earning less than $150,000 per year ($200,000 for couples). You must have a signed construction contract in place (within the specified deadlines) that is valued at a minimum of $150,000 but no more than $750,000. If you’re building a new property then the total value of the property cannot exceed $750,000, while for a renovation the property can’t be valued at more than $1.5 million before construction work begins. To see the full list of criteria, visit the official Queensland Government website.
- What Are the Benefits of the HomeBuilder Grant? The HomeBuilder Grant is fantastic for first home buyers or existing homeowners who plan to build a new home or who were hoping to renovate. This extra cash boost could be the difference between a stock standard project and one with a few added luxuries (which will undoubtedly add extra value to your property in the future).
- What Else Do I Need to Know About the HomeBuilder Grant? The HomeBuilder Grant was originally scheduled to finish at the end of 2020, but a recent government announcement has seen it extended to 31st March 2021. All eligible contracts signed before 31st December 2020 will receive $25,000, while contracts signed from 1st January 2021 will receive $15,000. Once a contract has been signed, construction must commence within 6 months and applicants must submit their claim by 14th April 2021.
First Home Concession
- What is the First Home Concession? When you buy a property in Queensland, you are required to pay stamp duty tax (also known as transfer duty) on the property. This is similar to the stamp duty you pay when you buy a car, and depending on the value of the property, it can be quite a lot of money. The Queensland First Home Concession is a rebate that is available to Queensland residents who are paying less than $550,000 for their first home (or less than $400,000 for a block of land).
- Who is Eligible for the First Home Concession? To be eligible for the First Home Concession you must first of all have never previously owned residential property or land. You must also be an Australian citizen and you’ll need to live in the property for at least one year after settlement. For full details, try out the Queensland Government interactive eligibility tester.
- What Are the Benefits of the First Home Concession? If you were to purchase a property in Queensland for $490,000, the transfer duty tax would ordinarily be $8,400. But for eligible first home buyers, the First Home Concession reduces the amount of duty payable to $0. Just think what you could do with an extra $8,400!
- What Else Do I Need to Know About the First Home Concession? Be aware that if you fail to move into the property for at least 12 months after settlement then you may be required to pay back some or even all of your First Home Concession. If you decide to purchase a property where there is an existing tenancy agreement in place then you can wait until after the conclusion of the current lease to move in – but if you decided to continue renting the property and you sign a new lease with the tenant, then you would likely lose your First Home Concession eligibility.
Queensland First Home Owners’ Grant
- What is the Queensland First Home Owners’ Grant? The Queensland First Home Owners’ Grant is a $15,000 cash grant available to first home owners who purchase a property in Queensland. This one-off payment can be put towards your home loan deposit or can be used for other costs associated with the purchase of your new home. There are no income caps with the First Home Owners’ Grant, but it is limited to those buying or building a new home.
- Who is Eligible for the Queensland First Home Owners’ Grant? To be eligible for the Queensland First Home Owner’s Grant you must be a genuine first home buyer who is building or buying a brand-new home, townhouse or unit. The total value of the property cannot exceed $750,000 and you must move into the property within one year of settlement, remaining there for at least 6 months (continuously). Eligibility will also depend on when contracts were signed, so see the state Government website for full terms and conditions.
- What Are the Benefits of the Queensland First Home Owners’ Grant? The First Home Owner’s Grant was introduced way back in 2000 in an attempt to make up for the added cost of GST on buying or building a new home. This grant is essentially a free cash handout that can make it possible for first home buyers to get into the property market sooner than they might have been able to otherwise.
- What Else Do I Need to Know About the Queensland First Home Owners’ Grant? The First Home Owners’ Grant varies between the different states and territories, but in Queensland, you can currently receive $15,000 for the purchase of a property valued at up to $750,000. You can apply for the First Home Owners’ Grant directly through the State Revenue Office (SRO) or through an approved lender.
For more information about which Government grants you may be eligible for, make an appointment to speak with one of our experienced mortgage brokers. At Coronis Finance, we’re committed to acting in the best interests of our clients and we’re always happy to help.