Understanding First Home Buyer Eligibility and What It Means for Your Family
You're generally eligible as a first home buyer if you've never owned property in Australia before and intend to live in the home as your principal place of residence. Most schemes also require you to move in within 12 months of settlement and remain in the property for a continuous period, typically between 6 and 12 months depending on the state or territory.
Consider a couple with two young children who have been renting in Adelaide's inner south for several years. They've saved a deposit through a combination of income, the First Home Super Saver Scheme, and a gift from family. Because neither partner has owned property before, they qualify for the South Australian $15,000 FHOG and stamp duty relief, provided they're purchasing a new home. The requirement to occupy the home for at least six continuous months starting within 12 months of settlement aligns with their intention to settle near family and established childcare, so the residency condition doesn't present a barrier.
The Commonwealth scheme known as the Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a 5% deposit, with Housing Australia guaranteeing the difference between the deposit and 20% of the property value. No income caps apply and no LMI is payable. Applications are made through participating lenders, not directly to Housing Australia, so your choice of lender will determine which loan features are available.
First Home Buyer Grants and Stamp Duty Concessions Across Australia
First home owner grants vary significantly by state and territory, ranging from $10,000 to $50,000. In most jurisdictions, the grant applies only to new homes, not established properties.
In New South Wales, the FHOG is $10,000 for new builds or substantially renovated homes with a purchase cap of $600,000 or land and build cap of $750,000, and a full transfer duty exemption applies on new and existing homes valued up to $800,000. A sliding concession applies on properties between $800,001 and $1,000,000.
Victoria offers a $10,000 FHOG for new homes valued up to $750,000, and a full stamp duty exemption on properties valued up to $600,000 with a sliding scale concession on properties valued from $600,001 to $750,000. The Victorian concession applies to both new and established homes.
Queensland provides a $15,000 FHOG for new homes valued under $750,000 for contracts signed from 1 July 2026. The grant was $30,000 for eligible contracts signed between 20 November 2023 and 30 June 2026. For established homes, duty is calculated at the standard home concession rate with an additional first home concession amount deducted, with a maximum first home concession deduction of $17,350 for properties valued up to $709,999. For new homes, a full transfer duty concession with no price cap applies for contracts signed on or after 1 May 2025.
South Australia offers a $15,000 FHOG for new homes with no property price cap for eligible contracts entered into on or after 6 June 2024, and stamp duty relief is available on new homes and vacant land only with no property value cap.
Western Australia provides a $10,000 FHOG with a value cap of $800,000 for homes south of the 26th parallel and $1,000,000 for homes north of the 26th parallel for eligible transactions commencing on or after 7 May 2026. For the First Home Owner Rate of duty, no duty is payable on homes valued up to $600,000, a concessional rate applies on homes valued between $600,001 and $800,000, and a single statewide threshold now applies regardless of location.
Tasmania offers a $20,000 FHOG for new homes for eligible transactions from 1 July 2026, subject to assent. The full duty exemption that applied to first home buyers of established homes with a dutiable value of $750,000 or less for purchases settling between 18 February 2024 and 30 June 2026 has ended.
In the Australian Capital Territory, eligible buyers are fully exempt from conveyance duty from 1 July 2026 regardless of the value of the property purchased and regardless of household income.
The Northern Territory offers a $50,000 FHOG for eligible first home buyers purchasing or building a new home, applying to contracts signed between 1 October 2024 and 30 September 2027 with no cap on the purchase or build price.
Your home loan structure and deposit size will influence which schemes you can access and how they combine, so it's worth reviewing your eligibility before you start searching for property.
How the First Home Super Saver Scheme Fits Into Your Deposit Strategy
The FHSS Scheme allows first home buyers to make voluntary concessional and non-concessional contributions into their superannuation fund and apply to release eligible amounts toward a home deposit, with up to $15,000 of personal contributions from any one financial year able to be released and a total cap of $50,000. Concessional contributions are taxed at 15% rather than at marginal income tax rates.
In our experience, couples who begin making contributions early in their savings timeline can accumulate a meaningful portion of their deposit through the scheme while reducing their taxable income. You'll need to obtain a determination from the ATO before signing a purchase contract, so forward planning is essential. The scheme works alongside other deposit sources including genuine savings, gift deposits, and equity from guarantors.
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Structuring Your Home Loan Application for Flexibility and Growth
The loan structure you choose at the outset should account for more than the current rate environment. Young families benefit from considering how their financial position might shift over the next five to ten years.
Fixed rate loans offer repayment certainty, which can be valuable when managing household budgets with childcare and education costs. Variable rate loans typically allow additional repayments without restriction and may include an offset account, which can reduce interest costs over time as you build savings or receive irregular income such as bonuses or tax refunds.
A split loan structure allows you to fix a portion of your borrowing while keeping the remainder variable. This approach provides some rate certainty while retaining flexibility to make extra repayments on the variable portion. The specific split ratio depends on your risk tolerance, income stability, and how much surplus cash flow you expect to have after meeting living expenses.
Offset accounts attached to the variable portion of your loan can be particularly useful for families managing variable income streams or building savings for future expenses. Funds held in the offset account reduce the interest charged on your loan without locking those funds away, so you retain access if needed.
Redraw facilities allow you to access extra repayments you've made on your loan, though lenders may impose conditions or processing times. If you anticipate needing regular access to surplus funds, an offset account generally provides more immediate access than a redraw.
When considering first home buyers loan features, review how each lender structures their variable and fixed products, as not all participating lenders under the 5% Deposit Scheme offer the same range of features.
Property Price Caps and How They Affect Your Borrowing Power
Property price caps under the Australian Government 5% Deposit Scheme vary by state and territory, with New South Wales caps set at $1,500,000 for capital city and regional centres and $800,000 for other areas, while Victoria caps are $950,000 for capital city and regional centres and $650,000 for other areas. Both the purchase price and the lender's assessed value of the home must be at or below the applicable cap.
Consider a family looking to purchase in a regional Queensland centre. Queensland's cap is $1,000,000 for capital city and regional centres and $700,000 for other areas. If they're purchasing in a defined regional centre, the higher cap applies, which expands the range of suitable family homes they can access under the scheme. If the property they're considering falls just outside the regional centre boundary, the lower cap applies, which may require them to increase their deposit or adjust their property search.
The same postcode classification affects which state schemes you can access. In Western Australia, whether a property falls under the $850,000 or $600,000 cap for the First Home Owner Rate of duty depends on its postcode classification, which must be confirmed through Housing Australia's postcode search tool.
Your borrowing capacity will determine the upper limit of what you can afford to borrow, but price caps under government schemes may restrict access to certain properties even if you have approval for a higher amount. Knowing the applicable cap before you start searching prevents wasted time inspecting properties you can't purchase under your intended scheme.
Gift Deposits, Guarantor Support, and Low Deposit Options
Many lenders accept genuine savings as well as non-genuine savings such as gifts from immediate family members. A gift deposit typically needs to be accompanied by a statutory declaration confirming the funds are a gift, not a loan, and that there's no expectation of repayment.
Guarantor arrangements allow a parent or other family member to use equity in their own property as additional security for your loan, which can reduce or eliminate the need for Lenders Mortgage Insurance. The guarantor doesn't make repayments on your behalf, but they are liable if you default. The guarantee can often be removed once you've built sufficient equity through repayments and property value growth, typically after a few years.
Eligible single parents or legal guardians can purchase with a 2% deposit under the Australian Government 5% Deposit Scheme. This provision recognises the additional barriers faced by single-income households and can significantly reduce the time required to save a deposit.
Low deposit options outside government schemes may still require LMI, which is a one-off premium that protects the lender if you default. LMI increases the upfront cost of purchasing but allows you to enter the market sooner with a smaller deposit. Whether paying LMI is worthwhile depends on how quickly property values are rising, how long it would take you to save a larger deposit, and whether rental costs exceed the additional interest and insurance costs of borrowing with a smaller deposit.
Your broker can model different deposit scenarios and demonstrate the total cost over the life of the loan for each option, which provides a clearer picture than comparing upfront costs alone.
Pre-Approval and Timing Your Application
Pre-approval gives you a clear borrowing limit before you begin property inspections. Lenders assess your income, expenses, liabilities, and credit history, then issue conditional approval subject to property valuation and final documentation.
Pre-approval generally lasts between three and six months depending on the lender. If your financial circumstances change during that period, such as a job change, additional debt, or a drop in income, you'll need to update your application before proceeding to formal approval.
For families purchasing in competitive markets, pre-approval can shorten the time between making an offer and exchanging contracts, which may make your offer more attractive to vendors. It also prevents the disappointment of finding a suitable property only to discover you can't borrow enough to complete the purchase.
When applying for pre-approval, provide complete and accurate information from the outset. Incomplete applications delay assessment, and inaccurate information discovered later can result in approval being withdrawn. Payslips, tax returns, bank statements, and identification documents are standard requirements, and your broker will confirm the exact list for your chosen lender.
Timing your home loan application around your settlement timeline ensures that rate locks and approval conditions remain valid through to settlement.
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Frequently Asked Questions
What deposit do I need to buy my first home in Australia?
You can purchase with as little as a 5% deposit under the Australian Government 5% Deposit Scheme, or 2% if you're an eligible single parent or legal guardian. Outside of government schemes, most lenders require a minimum 5-10% deposit, though a larger deposit may reduce or eliminate Lenders Mortgage Insurance.
Can I use the First Home Super Saver Scheme and the 5% Deposit Scheme together?
Yes, you can combine the First Home Super Saver Scheme with the Australian Government 5% Deposit Scheme. The FHSS allows you to contribute up to $50,000 into superannuation and release it toward your deposit, while the 5% Deposit Scheme allows you to purchase with a smaller deposit and no LMI.
Do first home buyer grants apply to established homes?
In most states and territories, the first home owner grant applies only to new homes, not established properties. However, stamp duty concessions are often available for both new and established homes, depending on the state or territory and the property value.
What is the difference between a fixed rate and a variable rate home loan?
A fixed rate loan locks in your interest rate for a set period, providing repayment certainty. A variable rate loan fluctuates with market conditions and typically offers features such as offset accounts and unlimited additional repayments. Many buyers use a split loan structure to access both certainty and flexibility.
How long does pre-approval last?
Pre-approval generally lasts between three and six months depending on the lender. If your financial circumstances change during that period, you'll need to update your application before proceeding to formal approval and settlement.
