First-time buyer grants to beat Victorian lockdown blues

The extended Stage 4 lockdown in Melbourne because of the pandemic has been frustrating for buyers and sellers alike. But for first-home buyers, it’s given them additional time to research the government grants and savings schemes that are available to help them make a purchase.

Supporting first-home buyers is critical to ensuring the real estate market in Melbourne and Victoria as a whole recovers quickly once the Covid restrictions are eased and we have reached the end of the “road out”, as the Premier describes it.

The State Government has two initiatives for first-time buyers and the Federal Government is offering the grandly named First Home Super Saver Scheme, plus a $25,000 grant for extensive renovations.

As an experienced real estate agent in your area, I’ve worked with first-home buyers who have used government schemes with great success.

The Victoria Government will now provide $10,000 under the First Home Owners Grant to applicants who are planning to purchase a new property, or one that is less than five years old. That figure doubles if you intend to live in regional Victoria.

Several concessions and reductions may be available to reduce stamp duty, too.

Stamp duty is a levy raised by the State Government based on the exchange of ownership from one party to another. The amount of duty depends on the value of the property and whether you qualify for any exemptions.

It’s fair to say the rules are quite complex. For example, while established homes are no longer eligible, you may be entitled to an exemption if that older home is valued at less than $600,000, or a partial concession if the home was bought for between $600,000 and $750,000 after July 1, 2017.

Exemptions and concessions are also available to those who buy an apartment off the plan, and young farmers purchasing their first property.

The Federal Government’s First Home Super Saver Scheme allows you to make additional contributions to your superannuation scheme to save for a deposit.

Any cash you put aside through this scheme – over and above your compulsory super contribution – will be taxed at 15% rather than at your usual rate.

The scheme can be combined with a promised $25,000 grant from the Federal Government for owners – including first-home buyers – to renovate an existing residence substantially. This is aimed at bolstering the construction industry during the pandemic.

I can help you understand the complexities of applying for these grants. Other professionals, such as a licensed mortgage broker and , will also be able to assist you.

Before you buy or build your first home in Victoria, here are some essential facts you need to know.

  • You can receive up to $10,000 under the Victorian First Home Owner Grant if your property is valued at no more than $750,000.
  • If you buy in regional Victoria, your grant doubles to $20,000 but the property being purchased must be less than five years old.
  • You may be eligible for the grant even if you have already owned a property. However, that property must have been rented for the entire period of ownership and must have never been your place of primary residence.
  • The property subject to the grant must be your primary residence for the following 12 months.
  • Applicants must be a citizen or possess residence, and be 18 or older, although exemptions can apply. New Zealand citizens holding an s32 visa may also apply, but they have to be in Australia at the time of settlement.
  • As a first home buyer, you will not have to pay stamp duty if the property is valued at less than $600,000.
  • As a further incentive, if you spend up to $750,000 to purchase your new home, you will pay a levy only on the difference between $600,000 and your price – not on the full value.
  • No benefit exists for a home bought for more than $750,000.
  • The First Home Super Saver Scheme has a set of complex rules. Consult the Australian Taxation Office about your eligibility and how to use this facility. The ATO says it may take up to a month to agree to release the funds.