First home buyers’ grants and schemes 2021 update

By Kirsten Friedli

GRANTS AND SCHEMES 2021 UPDATE
Now is an excellent time for first home buyers to purchase their home. Available state and federal government schemes give a substantial financial boost to first home buyers’ initial step into homeownership. See below the current grants and schemes on offer:

FIRST HOME BUYERS ASSISTANCE SCHEME
Eligible first home buyers may be entitled to a full exemption or concessional rate on transfer duty, under the NSW Government’s First Home Buyer Assistance Scheme. This is valid for agreements up to the 31st July 2021.

New Homes
First home buyers who purchase a new home valued at less than $800,000 can apply for a full exemption and pay no transfer duty. Buyers of new homes purchased between $800,000 and $1 million can apply for a concessional transfer duty rate.

Existing Homes
First home buyers who buy an existing home valued at less than $650,000 can apply for a full exemption and pay no transfer duty. Buyers of existing homes purchased between $650,000 and $800,000 can apply for a concessional transfer duty rate.

Vacant Land
There is no transfer duty if the land is valued at less than $400,000. For land valued between $400,000 and $500,000, a concessional rate applies.

In addition to this, first home buyers also have access to other state and federal government incentives:

FIRST HOME OWNER GRANT
The NSW government also continues to offer the $10,000 first homeowner grant. The grant is available to eligible people buying a newly constructed home or substantially renovated home with a total value of less than $600,000, or purchasers of land who are building a new dwelling worth no more than a combined $750,000.

HomeBuilder
The current HomeBuilder scheme can add $15,000 to first home buyers’ budgets. This grant is available to all eligible owner-occupiers who build a new home, substantially renovate an existing home, or buy an off the plan home/new home. This is valid up to 31st March 2021. 

This initiative is designed to boost the construction sector but has the added benefit of supporting first home buyers looking to build a new home. For more information, see the links below.

First Home Loan Deposit Scheme (FHLDS)
The First Home Loan Deposit Scheme (FHLDS) is an Australian government-funded initiative which guarantees some low deposit loans by helping eligible first home buyers avoid paying Lenders’ Mortgage Insurance (LMI). 

If a first-time buyer has less than 20% deposit, they would usually be required to pay lender’s mortgage insurance. However, under this scheme, eligible first home buyers can purchase a modest home, with a deposit of as little as 5% (lender’s criteria apply) and the government will guarantee the difference between what the first home buyer has saved and the 20% deposit threshold lenders usually require before they’ll provide a loan without mortgage insurance. This can save first home buyers as much as $10,000.

On Wednesday 3rd February 2021 the Australian government announced 1800 First Home Loan Deposit Scheme (FHLDS) places would be rolled over from the 2019-20 financial year into the current financial year. Mid-year there will be another 10,000 FHLDS places available. 

To find out more about all of these schemes, see the links below.

NSW’s Revenue grants information:
https://www.revenue.nsw.gov.au/grants-schemes

HomeBuilder information:
https://www.revenue.nsw.gov.au/grants-schemes/homebuilder

First Home Loan Deposit Scheme 
https://www.nhfic.gov.au/what -we-do/fhlds/

These NSW and Federal Government incentives undoubtedly help many first-time buyers fast track their purchasing plans. Combine this with low home loan interest rates; it makes 2021 an incredible time to buy your first home.

Disclaimer
Harcourts have used their best endeavours to ensure the information passed on in this document is accurate. However, you must make your own inquiries about the information in this document and seek advice from your financial advisor, broker, or accountant to ascertain its application to your circumstances.