There are currently two Federal Government schemes for consumers wishing to purchase a new residential home. The two schemes are summarised below :-

1. First Home Super Saver Scheme ( FHSS)

This scheme was first introduced by the Federal Government from 1st July 2017, enabling future home purchasers to make voluntary concessional (before tax) and voluntary non-concessional (after tax) contributions to their super fund to save for a first home.

The scheme can be used if you are a first home buyer and both of the following apply :-

  • You either live in the premises you are buying or intend to occupy as soon as possible,
  • You intend to live in the property for at least six months within the first 12 months you own it, after it is practical to move in.

This scheme is different to the First Home Deposit Scheme which came into effect on 1st January 2020 and is available via some financial institutions.

2. The Federal Government’s First Home Loan Deposit Scheme (FHLDS)

This scheme came into effect 1st January 2020.

Below is a summary of points from the scheme for eligible home loan borrowers :-

  • If you have saved 5% of the purchase price the government can guarantee the remaining 15% of the deposit. Therefore no need for lenders mortgage insurance (LMI) thereby borrowing up to 95%. A Cost saving to the borrower/s
  • Scheme is limited to 10,000 borrowers per year
  • Loan payments must be on a Principal and Interestbasis
  • Eligible borrowers can’t be earning more than $125,000a year or combined $200,000 for couples.
  • Must be Australian citizens
  • Need to be a first home borrower (if you own aninvestment property then NOT eligible)
  • Various property types permitted including apartments,townhouses, house and land package and existinghomes
  • Couples must be married or in de-facto relationships

Property value caps apply. Each state has different value caps. Please contact Paul for an update on the current applicable caps.There are various other government schemes available – these include First Home Owner Grants and Stamp Duty concessions. These schemes are state-based. Majority of lenders are taking part in these schemes

For more detailed information about the two schemes, call Paul today.


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