State-by-State - First Home Buyer Incentives

Each Australian state government offers schemes to assist first-home buyers in entering the property market.  These initiatives often come in the form of grants, which provide an eligible buyer with financial assistance to buy their first home.  Some states like NSW provide assistance via a duty exemption, concession, or grant.  To qualify as a first home buyer, applicants must meet specific criteria, including:

  • Purchasing a first home they haven’t previously owned in Australia.
  • Never having received a first home grant before.
  • Being an Australian citizen or permanent resident.
  • Being at least 18 years old (some exceptions apply).
  • Occupying the dwelling as their principal place of residence for a minimum period.

State Comparison

Here’s a comparison of the current grants available in each state:

Grant Value $10,000 $10,000 $15,000 $30,000 $15,000 $10,000
New or Existing New Home New Home New Home New Home New Home New Home
Dwelling Value $750,000 $750,000 $750,000 Unlimited $650,000 $750,000
Income Limit N/A N/A N/A Unlimited N/A N/A

Tasmania offers the most generous First Home Owner Grant, with an unlimited dwelling value, available until 30 June 2024.  No doubt this is to encourage migration to their state and the development of new housing stock.

Although all states prohibit buying an existing dwelling under their respective FHOG schemes, a residence that has been substantially renovated and not lived in, can qualify as a ‘’new home’’. 

Compliance and Investment

The requirement across all states to occupy a dwelling as a principal place of residence is meant to discourage people from buying their first home as an investment proposition.  However, it is known that some people do reside in a dwelling for less than 6-12 months and then vacate to lease the property to a tenant.  If the grant criteria are not met, the grant must be returned.  Some states, allow individuals who have owned a fractional interest in residential property used solely for investment purposes to be eligible for the grant on another property, provided they live in the new property.

Changing Landscape

State and territory governments make changes to the FHOG to manage issues such as housing affordability. These changes can occur quickly, although can sometimes lag behind rapid market movements, such as during the Covid pandemic period.  There are also suggestions these grants have fuelled rises in the market, particularly at the lower end of the market which comprises a larger percentage of First Home Buyers.  However, this is difficult to quantify or contain in markets where demand and supply forces are key to price volatility. 

ABS data from the 2021 Census revealed the following trends among recent home buyers (those who purchased a dwelling within 3 years of the census.

Homebuyer Trends

In 2019–20 there were approximately 1,115,000 recent home buyers. Of these:

  • More than a third (38%) were first home buyers.
  • Almost two thirds (62%) had previously owned a home (changeover buyers).

Of the approximately 420,100 first home buyers:

  • Most (92%) owned their home with a mortgage (somewhat curious 8% could fund a purchase without a mortgage as a first home buyer!)
  • More than half (61%) were in a household where the main reference person for the household was aged under 35 years.
  • Over two thirds (69%) were either couple families with dependent children (41%) or couple only families (28%)
  • Approximately one in six (17%) of the recent dwellings bought were new (this would imply a majority of these first home buyers either didn’t meet the eligibility criteria or didn’t apply for any grants given must buy a new dwelling under FHOG schemes or received alternative assistance such as reduced stamp duty).

Overall, FHOG Schemes have provided opportunities for first homebuyers to enter the housing market and have proven relatively successful. Although for some, the extra assistance may not be enough to enter expensive capital city markets given increasing median prices requiring larger deposits. 

To streamline the first home buying process, Acumentis offers valuation services that provide first home buyers with the confidence needed to make one of the biggest decisions of their lives.

Gerard Clarke
Director – Risk & Performance
— Brisbane Property Valuers
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