If you’re buying your first home in Victoria, there are three main forms of government help to know about: the First Home Owner Grant, stamp duty savings for first home buyers, and the Australian Government 5% Deposit Scheme. Each works differently and has its own rules, and in many cases you can use more than one on the same purchase.
The Victorian First Home Owner Grant
The First Home Owner Grant (FHOG) is a one-off payment of $10,000 from the Victorian Government. It’s administered by the State Revenue Office (SRO).
The grant is only for new homes. That means a home that hasn’t previously been sold, lived in, leased or used for short-term accommodation. It can be a house, townhouse, apartment or unit, and it covers buying a newly built home, buying off the plan, or building a new home yourself. The home must be valued at up to $750,000.
Buying an established home? The FHOG won’t apply, but the stamp duty savings and the 5% Deposit Scheme may still help.
Stamp duty exemption and concession
Stamp duty (land transfer duty) is often the biggest upfront cost after your deposit. Victorian first home buyers can save a significant amount:
| Dutiable value of the home | What first home buyers pay |
|---|---|
| Up to $600,000 | No stamp duty (exemption) |
| $600,001 to $750,000 | Reduced stamp duty on a sliding scale (concession) |
| Over $750,000 | Standard stamp duty |
The dutiable value is generally the purchase price or the market value of the property, whichever is greater. Unlike the grant, the stamp duty savings apply to both new and established homes. To get a feel for the numbers, you can estimate your duty with our stamp duty calculator.
The Australian Government 5% Deposit Scheme
The 5% Deposit Scheme, formerly known as the Home Guarantee Scheme, is run by Housing Australia. It lets eligible first home buyers purchase with a deposit of as little as 5% without paying lenders mortgage insurance (LMI). The government provides a guarantee to your lender for part of the loan, which is what allows the lender to skip LMI. You remain responsible for the whole loan and every repayment.
There are no income caps on the scheme. However, the home’s price must be at or below the property price cap for its location, and you must apply through one of the scheme’s participating lenders. Other eligibility rules also apply, including:
- being at least 18 and an Australian citizen or permanent resident
- being a first home buyer, or not having owned property or land in Australia in the last 10 years
- buying a home to live in yourself, not an investment property
- taking a principal and interest home loan
- meeting the lender’s own credit and lending criteria.
Price caps and rules can change, so check the current details on the official scheme website before you start looking.
A note from Jenny The schemes can work well together, but each one has its own paperwork and timing. I check your eligibility for each scheme early, so you know your real budget before you start inspecting homes.
Who is eligible for the Victorian schemes?
The FHOG and the stamp duty savings share many of the same rules. The key points are:
- Age. Every buyer must be at least 18 and buying as an individual, not through a company or trust.
- Citizenship or residency. At least one buyer must be an Australian citizen or permanent resident. New Zealand citizens may also qualify, so check the SRO’s rules if this applies to you.
- Living in the home. At least one buyer must live in the home as their principal place of residence for at least 12 continuous months, starting within 12 months of settlement (or of construction finishing, for the grant). If you don’t meet this, you may have to repay the benefit.
- Prior ownership. You generally aren’t eligible if you, or your spouse or partner, have already received a first home owner grant or first home buyer duty concession, owned residential property in Australia before 1 July 2000, or lived for at least six continuous months in a home you owned on or after 1 July 2000.
These rules apply to your spouse or partner even if they’re not buying with you. There are some exceptions, including for members of the Australian Defence Force and for people affected by family violence, so it’s worth reading the SRO’s guidance closely.
Putting it together
Here’s how the schemes might combine for different buyers. These are simplified examples only, and your eligibility depends on your circumstances and the rules at the time.
- Buying a new home valued under $600,000: you may qualify for the FHOG, pay no stamp duty and use the 5% Deposit Scheme, subject to the price cap.
- Buying an established home valued at $650,000: the FHOG won’t apply, but you may receive a stamp duty concession and could use the 5% Deposit Scheme if the home is within the price cap.
- Buying a home valued over $750,000: the Victorian grant and duty savings won’t apply, but the 5% Deposit Scheme may still help if the home is under the local price cap.
Getting started
Before you begin house hunting, it helps to:
- Confirm which schemes you’re likely to be eligible for.
- Work out your borrowing power, deposit and buying costs.
- Get pre-approval with a lender that can offer the schemes you need.
- Keep your paperwork ready, as each scheme has its own application and evidence requirements.
The FHOG is usually lodged through your lender, if it’s an approved agent, or directly with the SRO. Your conveyancer generally applies for the stamp duty savings as part of settlement, and a participating lender handles the 5% Deposit Scheme application alongside your loan.
This information is general in nature and does not take into account your objectives, financial situation or needs. Lending criteria, terms, fees and charges apply and vary between lenders. Speak with us for advice about your circumstances.