If you're thinking about buying your first home, there's a range of state and federal incentives you may be eligible for.
Wading through what's on offer and what applies to you can be confusing. Here's some advice to help get started.
Where to start?
The first step, according to financial educator Natasha Janssens "is doing some research and setting some goals".
The former financial planner and mortgage broker says to consider "your stage of life", factoring in your career and whether you're certain about where you want to move or if you're more flexible.
This "will help you decide whether you are best positioned to buy an owner-occupied home (a principal residence to live in) or an investment property."
While there are potential tax benefits to owning an investment property, to be eligible for first home buyer schemes and grants, living in the property (for at least a period) is often required.
Ray White's chief economist Nerida Conisbee advises assessing how much you've saved and your budget before speaking with a bank or mortgage broker about what you may be eligible for.
She says you can research what is available online, adding "there's a lot of layers" and "it can get quite complicated", but getting your personal details in order first can help.
She explains that factors such as how much you earn, the cost of the property and whether you're buying a newer or older property can impact eligibility.
For some prospective buyers who are looking in expensive markets, she adds that it might make more sense to forgo incentives and 'rentvest' instead, renting a home that's suitable for your lifestyle while owning elsewhere.
Mortgage broker Melissa Gielnik says the schemes and grants do change — especially around elections — so it's important to have the latest information.
What kind of incentives are available?
On a national level, Ms Janssens says the First Home Super Saver Scheme "can be a useful vehicle to help you save up for a deposit."
"By offering tax concessions and a higher interest rate than what is available in savings accounts.
"There is fine print involved, so it is important to read through the guidelines carefully and make sure you speak with your super fund before you engage."
There is also the Home Guarantee Scheme, "which comes with its own caps and restrictions and requires the buyer to have between a 2 per cent and 5 per cent deposit saved."
Designed to help Australians buy sooner, Ms Janssens says it "enables the buyer to purchase a home without paying lenders mortgage insurance which can present a saving of [for example] $20,000."
Ms Gielnik says usually mortgage insurance is paid by first home buyers with a deposit of less than 20 per cent.
She adds only certain banks offer the home guarantee scheme.
At the state or territory level, first home buyers may be eligible for grants. For example, Ms Janssens says the Victorian state government offers a $10,000 grant if you're buying or building a new home for $750,000 or less.
Similar grants are available in Western Australia, New South Wales, Tasmania and there are potential grants of $15,000 in South Australia, $15,000 or $30,000 in Queensland and $50,000 in the Northern Territory.
Stamp duty is a tax on property collected by the state or territory you buy in and exemptions or reductions are available for many first home buyers.
In Victoria for example, a first home buyer is exempt if their home has a "dutiable value" (this is the price you paid for the property or its market value, whichever is greater) of $600,000 or less. While homes with dutiable value between $600,00 and $750,000 are eligible for concessions, which applies to both new and established homes.
Like many other incentives, to be eligible, buyers are required to live in their home for a set period. In this case, 12 months.
Yes, you can also combine schemes
First home buyer grants and schemes can also be combined.
Ms Janssens says, it's "really important to take your time understanding the restrictions that come with these grants and schemes as there are limited spots available."
"[There's also] wait times for applications — and income, location, value and other restrictions placed on these schemes."
What about mortgage brokers?
Ms Conisbee says a "really good" mortgage broker will have a "detailed understanding of what's available [to first home buyers]."
Ms Gielnik says mortgage brokers "coordinate the process for our clients."
She says this can be particularly helpful when a client is self or casually employed, as brokers should know which lenders are more likely to accept those borrowers.
According to the Australian Securities and Investments Commission (ASIC) MoneySmart website lenders (usually a bank) pay the broker a fee or commission.
"Some brokers get paid a standard fee regardless of what loan they recommend. Other brokers get a higher fee for offering certain loans."
A "best interests duty" was enacted after the royal commission into the banking sector to legislate that brokers act for their clients. However a potential conflict of interest remains while banks, rather than buyers, pay brokers.
If you're unsure whether you're getting a good deal, MoneySmart recommends asking around or comparing online.
If you are thinking of or planning to use a mortgage broker, finding the right one can be a process of its own.
MoneySmart recommends first checking a broker is licensed to give you advice on ASIC's Professional Registers Search.
MoneySmart advises bringing a list of must-haves and nice-to-haves when meeting with a broker and asking them to explain how each loan option works.
The site also has a list of questions you can ask your potential broker, including "what kind of lenders can't you access?"
Ms Janssens says to "look for someone who has experience working with first home buyers and who you find to be friendly and approachable."
It's important to "feel comfortable with them" as they'll be diving into the weeds of your financial habits.
Ms Gielnik says to have a look at their online presence — from reviews to their social media to check for red flags.
This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.
