Financing Your Deposit; Government Grants

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When it comes to financing the deposit for your property, there are a few government grants out there that may be able to provide you with support.

Unfortunately, grants provided by state governments are generally targeted at first home buyers, as they are essentially there to enable housing to become more accessible. Grants specifically for investors are few and far between – the only notable grant that will assist you from a purely investment perspective is the New Home Grant Scheme in NSW.

While this is a shame, there are a few smaller grants you might like to take advantage of that can assist you when buying new properties. Depending on what your plans are, you may still be able to make use of the First Home Buyers Grant, which is available in some degree across all States and Territories in Australia.

Please keep in mind that there are a few rules around these grants in order to be eligible, as well as a minimum period (usually 6 – 12 months) of occupancy in the home required by the actual owner – plus you can’t have owned property previously!

Now you might be thinking “Hold on Sasha, I want to purchase an investment property, not a home to live in!”

Trust me, I hear you. But sometimes when it comes to your investment journey, you need to take smaller steps that propel you towards your goal. This may just be another one of those small steps for you to include in your plan!

If you do meet the eligibility criteria and are looking to start your investment journey, it’s at least worth considering this option, particularly if you’re otherwise unable to fund the full amount for the deposit by yourself.  

What you need to decide is whether living there for 6-12 months is worth being able to purchase your ideal property sooner! While it won’t be the right solution for all, it can be a great way for first-time investors to get their foot in the door.

One thing that is important to note is that the grant amount offered and the necessary requirements for eligibility differ slightly across the various states and territories in Australia.

If you’re interested in investigating government grants more, below are the various ones on offer around the country at the moment!

NEW SOUTH WALES:

New Home Buyer’s Assistance Scheme

Amount: Transfer duty exemptions in accordance with duty calculator (from 1 July 2017).

What For: The First Home Buyers Assistance scheme provides eligible purchasers with exemptions on transfer duty on new and existing homes valued up to $650,000 and concessions on duty for new and existing homes valued between $650,000 and $800,000.

First Home Buyers Grant (New Homes)

Amount: $10,000 (from 1 January 2016)

What For: From 1 July 2017, the First Home Owner Grant Cap for new home purchases is $600,000; for a property where you enter into a contract to build, or are an owner builder the total value cannot exceed $750,000

More Info: www.osr.nsw.gov.au/grants

VICTORIA:

First Home Buyers Grant

Amount: $10,000 (from 1 July 2013), $20,000 for new homes built in regional Victoria

What For: New builds only, valued up to $750,000. Victoria also offers up to 50% discount on stamp duty for all properties valued up to $600,000, purchased by first home buyers.

More Info: www.sro.vic.gov.au

QUEENSLAND:

First Home Buyers Grant

Amount: $20,000, until December 31, 2017

What For: New builds only, valued up to $750,000.

More Info: www.treasury.qld.gov.au

WESTERN AUSTRALIA:

First Home Buyers Grant

Amount: $10,000

What For: New builds or “substantially renovated” homes, valued between $750,000 and $1,000,000, depending on location. Western Australia also offers stamp duty concessions for first-time buyers.

More Info: www.treasury.wa.gov.au

SOUTH AUSTRALIA:

First Home Buyers Grant + Off Plan Pre Construction Grant

Amount: $15,000 for FHOG and $10,000 Pre Construction grant for contracts entered into between 22 June 2017 and 30 September 2017

What For: New builds only. South Australia also offers stamp duty concessions for the purchase of off-the-plan apartments in specified areas.

More Info: www.revenuesa.sa.gov.au

TASMANIA:

First Home Buyers Grant

Amount: $20,000 (until June 30, 2018)

What For: New builds only, with no threshold.

More Info: www.sro.tas.gov.au

NORTHERN TERRITORY:

First Home Buyers Grant

Amount: $26,000 (from 24 May 2016)

What For: New builds or existing homes with no threshold. The Northern Territory also offers up to $2000 for First Home Owners Grant recipients to buy household goods and up to $23,000 in stamp duty relief for first home buyers purchasing an established home valued up to $650,000.

More Info: www.treasury.nt.gov.au

ACT:

First Home Buyers Grant

Amount: $7,000 (from 1 January 2017)

What For: New builds or “substantially renovated” homes, valued up to $750,000. The ACT also offers stamp duty concessions for first-time buyers buying new homes; full concession up to $455,000 and a sliding scale to $585,000. Gross income thresholds apply in the ACT.

More Info: www.revenue.act.gov.au

So there you have it! Hopefully that helps you out with a few options. Be sure to let me know down below if you have any questions!

Until next time,

Sasha

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