What Grants & Schemes Are Actually Available for First-Home Buyers?

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Hello, and welcome back to another episode of the home building like a boss podcast. Today, I’m going to be chatting to you about what grants are available for first home buyers here in WA. Now, there are a few different grants. On at the moment and using these grants as a first time buyer, you can save on quite a lot of upfront costs.

So the first one is the normal first time buyer’s grant that has been around for a long time now. And the first time buyer’s grant is one off payment of 10, 000. And also helps you cover your, some of your stamp duty. Now as a first time buyer, when you buy established, you get free stamp duty up until a property of 430, 000.

If you purchase a established property for 500, 000, you are paying the pro rata difference from 430, 000 to 500, 000 on stamp duty. When you build as a first time buyer. You have no stamp duty on a block of land up until 300, 000. Now, why is this different to established? Well, when you build or purchase a block of land, you are only paying stamp duty on the block of land.

When you buy an established property, you are paying stamp duty on the total value and sale of the whole property. So building already just on using your stamp duty on a block of land, you can save quite a lot of money as you are only paying stamp duty on a block of land. I have some clients last week who secured a block was 330, 000.

So they’re paying a concessional rate. of Stamp Duty from 300, 000 to 330, 000, which works out to be roughly like about three, three and a half grand. So you can see there as a first time buyer, you save quite a lot with saving on Stamp Duty. Now, if you go established, you don’t get the 10, 000. Grant, you only get the stamp duty that you’re saving on.

When you build, you save on the stamp duty and you get the additional 10, 000 grant. So overall it does work better building versus established as you do get that 10, 000, but you do have to work out what. Better for you, whether established or build. Only you can know that, so you need to work out. Yeah, he’s build or buying established, going to be better for me.

Now, the other scheme that we have at the moment is the first home guarantee scheme. This one here is saving on your lender’s mortgage insurance. Now, what is lender’s mortgage insurance? Lender’s mortgage insurance. Is basically a fee that the bank adds to your loan to cover the lender. It covers them if you can’t pay for your mortgage.

So it doesn’t cover you. It’s a fee that you have to pay if you have a deposit less than 20%. So that’s where a lot of people these days, you think 20 percent deposit. You do need a 20 percent deposit normally to pay no lenders mortgage insurance. But you can get into the market with a minimum deposit of 5%.

If you get into the market with a deposit between 5 percent to 20%, you will need to pay lender’s mortgage insurance. Now, the first home guarantee scheme waives You as a first home buyer paying your lender’s mortgage insurance. So all in all, you do save quite a lot of money if you bundle this together with the first home buyer’s grant.

Saving on your lender’s mortgage insurance, you can save about 10 to 20 grand on a loan. So this 10 to 20 grand can, you can use it towards your block of land, you can use it towards your home, kitchen upgrades. It’s awesome because you’re not paying lender’s mortgage insurance and you can get into the market sooner and quicker with a 5 percent deposit.

Saving a 20 percent deposit, you can, it can take a while longer to get into the market. So using this to your advantage helps. helps quite a lot. With the first time guarantee, there are a few eligibility and limits that go along with this. And this has just changed recently. And the new changes come into effect from the 1st of July.

Now let’s talk about the current. eligibility and criteria. So you must be over 18 years of age. You need to have an income of less than 125, 000 if you’re a single applicant. And for a couple it’s capped at 200, 000. And what they use here is your ATO tax summary from the previous financial year. So if you’re lodging for your finance this year, they’ll be using your tax income from last year.

And if you’re from the 1st of July. You will need to get your tax statement done as soon as possible as that is what they’re going to take into consideration for your income limits. You need to show that you’ve never owned a property before in Australia. From the 1st of July this changes to if you’ve never owned a home in the last.

You’re then eligible for applying for this, which is really, really awesome. If you haven’t owned a property in the last 10 years, you can on the 1st of July apply to use this grant to purchase a second property. Currently, you must be an Australian citizen to be eligible for this scheme to receive no lenders mortgage insurance from the 1st of July.

This is actually changing to permanent residents. And citizens. Now this is amazing. It opens up the doors for so many more people to apply. I know we had, I had some clients, uh, this year who had to wait to receive, go from permanent resident to citizen to apply for this. And that can be a lengthy process depending where you are in that process and timeline of applying for your citizenship.

So this is really awesome as it opens those doors to people who are permanent residents. Now you can apply for this as well. The last change is for the first home guarantee scheme. You either had to apply single or be in a de facto relationship. Now you can apply. To build a house with your brother, sister, cousin, friend, and be eligible for the first home guarantee scheme.

So this is really awesome. You can apply with a cousin, friend, family member, sister, brother now, rather than just being a single applicant or in a de facto relationship. The next. Grant and scheme we’re talking about here. This one is actually available for second and third home buyers as well. And this is the family home guarantee.

The family home guarantee is here to support single parents with at least one dependent who want to get into the market with a deposit as little as 2 percent without paying lenders mortgage insurance. This one here is. So, so good for single parents getting into the market, need to get out of a rental.

It really gives you that boost up and a little bit of help to get into the market. So normally if you were looking at a 2 percent deposit, you, you have to look at Keystart rather than a bank, which is a 5 percent deposit. Using this scheme to get in at a 2 percent deposit with a bank. Keeps your interest rate down versus getting into the market with Keystart at 2 percent deposit, who has a much higher interest rate.

So this here is really helpful with the low deposit one, but also going through a bank, which your interest rate is much lower than what you would with Keystart and you’re also saving on your lender’s mortgage insurance, which is the same, how I explained earlier from the first home guarantee scheme.

It’s exactly the same. You need to be a single parent with at least one dependent, but you also, if you are going through a separation, you actually have to be divorced and show a divorce certificate and proof that you are now single. If you’re in a de facto relationship, not married, that’s okay. If you were married, we had a client go through this and we needed to obtain a divorce certificate, divorce proof that they were now officially divorced rather than just separated to be eligible for this scheme.

And also, You can’t be earning over 125, 000 per year, and yes, you can have previously had a sec a home, so you can use this to get into your second and third home. With the grants available at the moment, you have your normal 10, 000 first home buyers grant, which as a first home buyer helps you save on stamp duty and also gets you an additional 10, 000, which you can use towards your deposit.

So if you need a deposit of 35, 000 now, it is now 25, 000. So let’s say we’re working off a 500, 000 package. Your deposit is 25, 000 genuine savings. You can use your 10, 000 first home owner’s grant towards this. Then you have your first home guarantee scheme, which you will be saving on lender’s mortgage insurance.

It’s important to note the eligibility and criteria with this one as well. They’re a little bit different to the previous first home buyer grant. You can, for the 10, 000 First Home Buyers Grant, be a permanent resident and apply for that one, as well as a citizen. So that is no issue with that one. You must have never previously owned a house before.

And with the First Home Guarantee Scheme, there is also a package limit, or property limit, that you can purchase this grant with. obtain a house and land package or a property up to a maximum of 600k. That is really important to know. It previously was 550 last year and then they increased it to 600k. If you were looking at a property of or house and land package of 605 or even 601, 000 You will not be eligible for the first home guarantee scheme to save on your lender’s mortgage insurance.

So that’s really important to know. And also the first home buyer grant has a cap limit of 750, 000 for your house and land package. So if you go over the amount of 750, 000 for your first home, you. You are not eligible for the first homebuys grant for the 10, 000 and the stamp duty either. So that’s really important to know when you’re looking at your situation, your finances and what grants you’re available, your packages in your houses, keep that in mind and consideration for what you are doing.

My clients that I mentioned 330, 000.

They were eligible for up until 700, 000 to borrow, but have, we’ve, they’ve decided to stick to 600 K house and land package to stay within that scheme to save on their lender’s mortgage insurance. If they go over that. And they start looking at a package of 650, 700 K. It worked out that they were adding about 20 to 25, 000 of lender’s mortgage insurance onto their loans.

So keeping that package under 600, 000 then meant that they could save on that lender’s mortgage insurance, take up the 10, 000 first home owners grant and save on their stamp duty. So they’re saving a huge amount of money getting into the market using these grants that are available for them now. If you have any questions about grants available, if you’re eligible, please reach out to me via Instagram or book in a call.

Which you’ll be able to find the link in the show notes below book in a call and we can have a bit of a Chat and I can also direct you to a mortgage broker that I work very closely with her name is tanya You’ll be seeing her on the podcast very soon. She’ll be able to work side by side with me to help You understand what grants are available for you and based on your current situation.

So booking a call on the show notes below. If you want to chat a little bit more, otherwise flick me a DM on Instagram as well. Thank you so much for tuning in to the home building like a boss podcast. I hope you enjoyed today’s episode and learn something new. Remember. You’ve got this and I’ve got your back.

Until next time, stay inspired, stay informed and stay confident on your building journey. I can’t wait to chat with you on the next episode. Don’t forget to check out the show notes for more information and free resources. If you haven’t already hit that subscribe button, so you never miss an episode of the home building like a boss podcast.